Nearshoring – A Sourcing Strategy of Tomorrow

What Is Nearshoring?

Nearshoring is the practice of transferring a business operation to a nearby country rather than transferring them to the cheapest possible manufacturer, wherever on the planet they might be. Nearshoring eliminates the three common issues that brands and retailers experience with manufacturers from faraway countries (offshoring):

1. 1. Carbon footprint
2. 2. Language barrier
3. 3. The time zone difference

1. Nearshoring reduces carbon footprint

There’s a stark difference in CO2 emissions between a manufacturer from a nearby country shipping your goods in CNG-powered vans and a manufacturer from a different continent shipping them by cargo ship or aeroplane.

This is why going for nearshoring will save you tons of CO2, which will do wonders for your environmental strategy, should you have one in place.

This is how far FUSH˚ delivery vans (using CNG as fuel) have to drive to get to Paris, London and Berlin. Right-click or press the screen to open the image in a new tab to see it up close.

2. No language barriers with the nearshoring manufacturers

This is true more often than not. If a nearshoring manufacturer doesn’t speak some of the European languages, they will speak decent English 90% of the time. That way, you’ll communicate your ideas easier and the manufacturer will know what to do. This translates into faster delivery of the very thing you asked for.

No returns and no reorders of the same product.

3. Time zone differences

When your supply chain is no more than a time zone away from you, that means they can reply to your emails or answer your calls immediately. On the other hand, when there are six or more hours between you and your clothing manufacturer’s time zones, that means delayed communication. That also means that you can’t escalate any issues in a timely manner.

The benefits of the nearshoring model are extending beyond the three major ones we just discussed. Let’s see what those are.

Other benefits of nearshoring

Besides helping you bridge the language barrier and time zones as well as reduce CO2 emissions, nearshoring makes for easier factory visits and it’s the safest sourcing choice for new clothing brands.

Nearshoring facilitates factory visits

It’s much easier to oversee the circumstances under which manufacturers make your product when they’re a two-hour flight away from you. It makes it easier to do it unannounced even. That way, you can see whether someone from your supply chain has something to hide or not.

If you are easily satisfied with social compliance certificates and standards, let us remind you of one shocking truth. A factory in Dhaka, Bangladesh that had all the shiny certificates money can buy, collapsed in 2013, taking the lives of over 1000 garment workers. Certificates mean nothing if you can’t regularly feel the pulse of your supply chain.

These are no working conditions you want to be associated with

Even if you want to regularly check on your manufacturer from Bangladesh, India, Pakistan, China or south-eastern Asia, it’s hard to fit flying halfway across the world in a busy schedule of a brand/retailer owner.

The shortest return flight to one of the most common garment manufacturing hubs takes at least 16 hours. Not to mention that it’s by no means sustainable to fly that distance that often.

Visit a Factory from a Nearby Country

Instead of suffering that whole ordeal of working with an offshore supplier, with a nearshoring one, you’re a few hours away from a factory visit, be it by plane or by car. Much easier to fit into the schedule, much better for the planet, especially if it’s manageable to drive to the supplier’s location.

Below are the locations of our factories in Serbia so you can calculate what works best for you in terms of potential visit(s):

Factory in Belgrade: (view in Google maps)

Factory in Oraovica: (view in Google maps)

Nearshoring is ideal for up-and-coming European brands

This is the only sourcing model you as a growing European clothing brand should think about for a variety of reasons:

Nearshoring makes reorders a walk in the park

When you’re at the beginning of your journey as a clothing brand, it’s borderline impossible to predict when will the breakthrough moment happen. That means that you’ll hardly be able to guess when will you’ll need to order tenfold from what you usually did. But once that moment happens, you’d want to be prepared.

That is why overseas suppliers aren’t suitable. It takes too long to get your reorder in your warehouse and shipping costs have been on a steady rise.

Sourcing from overseas in 2022 implies that you’ll have to wait up to 100 days to get the reorder shipped.

Waiting this long for a reorder of a collection that is nearly sold out is not something a clothing brand on the rise should afford.

On the other hand, sourcing your garments from a nearshoring clothing manufacturer means they’ll be able to deliver the reorder by van in under one week. Just in time to restock the warehouse and keep on meeting the high demand for your product.

Startups and young brands need lower minimum order quantities (MOQs)

Unless you receive funds from a VC investment, chances are your budget won’t be able to meet MOQs over 500 pieces. Most overseas clothing manufacturers have such minimums, often even higher. That enables such manufacturers to give a lower price, which attracts huge brands that care only about their profit margin.

A new brand might not have enough funds to support such a high MOQ, even with low manufacturing cost. Some manufacturers might even refuse to work with you unless you can prove you’re making profits of over 1M per year.

European clothing manufacturers rarely operate in that fashion. Most have set up their production to make versatile products with much fairer minimums. FUSH˚, for instance, has an MOQ as low as 150 pieces per design/colour.

Label yourself as different in the right way

“Made in *insert European country*” on a label is not something you often see on the clothes you can buy in shopping malls or online. When you use it to show you’re selling a Europe-made product, you’re setting yourself apart from your competitors. You’re implying a lot of good practices are taking place in your supply chain.

Of course, you’ll have to prove it because Europe isn’t impervious to bad manufacturing practices and inhumane working conditions. Research that the Clean Clothes Campaign carried out shows that brands, governments and corrupt manufacturing directors love to cut corners. Especially when workers’ rights are concerned.

Nearshoring manufacturers must rely on technology

Especially in Europe, manufacturers can’t rely on an extensive workforce and would be the first to follow technological advances.

For instance, most nearshoring manufacturers would have CNC fabric spreading and cutting machines that make the process of making trims fast and error-free.

That is not always the case with overseas manufacturers that have to provide jobs to much greater demographics and would be reluctant to use technology where they could.

Automatic fabric cutter Orox Flexo C-800 with the top-of-the-line robotic arm and easy-to-use CNC controls. This one is located at our Belgrade factory.

After reading all this, there’s nothing left for you but let us know about your project. Please share as much information as possible about your order – material composition, tech pack, grading, instructions for printing, labelling and packing. That’s the only way we can give you a proper price estimate.