Why nearshoring debates in fashion miss the mark

It feels like every few weeks fashion discovers a new sourcing solution. A country gains momentum, headlines follow and suddenly every conversation turns into the same debate: Should we move production closer to home? Or should we outsource over there?

They’re fair questions, but they’re also incomplete. The bigger risk today isn’t that factories are far away. It’s that teams are forced to commit earlier, with less certainty, in an environment where trade conditions swing, demand fluctuates and cost bases shift mid-season.

Volatility is no longer an exception to the rule but a permanent planning condition.

Most executives expect disruptions and rising duties to continue shaping the industry this year, and many brands are responding by reshuffling their sourcing footprints. But changing geography doesn’t change how decisions get made, only the timeline.

So the better questions aren’t “Where should we go?” They’re operational ones: How late can you commit? How fast can you redirect? How much damage happens when you try to pivot?

Fashion’s footprint might move, but it might not settle

McKinsey data shows that US apparel and footwear imports from Cambodia increased 42% between 2019 and 2024, while imports from China declined by 30%.

What this data doesn’t show, however, is how many of these shifts were made under time pressure, with systems and processes unchanged.

It is still useful data to show where brands are recalibrating, but companies should be cautious in thinking that the McKinsey data alone is sufficient evidence to rush into a new “big hub.”

The more reliable indicators are operational longevity and capacity.

Hubs gain momentum when they offer a workable mix of cost, capacity, workforce and trade terms. However, they lose momentum when one of those inputs shifts. If one variable change is enough to offset the original benefits, the move was never structurally sound to begin with.

The act of moving production closer to home (or even further away for offshoring) is only half the battle. Once done, companies still need to do considerable work to earn the long-term benefits.

Nearshoring changes the timeline, not the process

Nearshoring is often praised for its speed, but speed only helps when organisations can use it.

We often see teams moving production closer to market while still finalising colourways four weeks before ship, approving lab dips over email, and amending purchase orders multiple times per style. In these instances, proximity doesn’t remove friction.

It squeezes the timeline and magnifies poor operating habits.

The old advantages of scale and low-cost sourcing no longer hold true in a choppy, up and down market like today. Relocating parts of operations to benefit from lower tariffs is a sensible choice, but it shouldn’t be done if the hope is to fix broken or messy processes.

Brands who receive tangible value from nearshoring, onshoring, or selective offshoring tend to understand this and do several unglamorous things consistently.

1. Treat lead time as a commercial lever and not a calendar metric

Quicker or cheaper production only matters if it reduces other risks, e.g., fewer late-season scrambles, fewer markdowns, and less capital tied up in slow-moving inventory.

Long lead times are not always inherently bad. They can be used to buy organisations time to wait for clearer signals from the market before they lock in significant volume.

When used like this, companies tend to adopt a portfolio approach which leverages speed where demand is unclear, and stability where the product is replenishable and predictable.

 2. Stop pretending diversification is free

Broader supplier bases can reduce concentration risk, but they also multiply the day-to-day load. Diversification often means managing five MOQ structures instead of two, different carton rules by origin, and separate freight workflows – all of which quietly become permanent.

Volatility isn’t a one way street either. Suppliers all over the world are being asked to absorb costs, renegotiate contracts, and build buffers like minimum order or capacity commitments.

Unpredictable conditions push everyone toward terms that make planning survivable.

Diversification works best when commercial terms and operational data are built to handle it. Otherwise, “resilience” turns into a never-ending queue of special cases.

3. They remove work that gets in the way

Relocating operations usually means lower costs and less friction, but that only holds true if it doesn’t create extra administrative burden or drain resources.

In the case of sourcing and supply chain, this typically means fewer manual handoffs, clearer sight of what’s committed versus still flexible, and reliable product and supplier data.

None of it is particularly glamorous. Nor does it sell clicks or persuade boardrooms.

But the truth is over a longer time frame, those seemingly small benefits compound into much larger advantages. Reliable data and clear views of what’s in flight fundamentally change how teams plan and, by default, execute.

4. They commit in stages, not all at once

Staged buying is far from a novel concept in fashion. It is how most companies operate. However, when timelines tighten and decisions get pulled forward, teams require systems that support staged commitment properly.

If a system only recognises commitment as a single act, e.g., raising a purchase order, teams are forced to lock their buys in early, long before demand, margin, or supply needs are clear.

What we see repeatedly is teams covering core volume early because systems force binary commitment, then scrambling to claw back flexibility later through spreadsheets and side agreements with their suppliers.

Staged commitments allow teams to plan and move forward without forcing finality early. Core buys are locked confidently while cash and capacity stay available for seasonal or trend pivots.

The next phase is a portfolio, not a migration

No one is saying nearshoring, onshoring or offshoring is bad.

As the industry continues its global recalibration, some production will move closer to home markets where speed has real commercial value, while others will remain further away because productivity, capability, and scale still win in the right categories.

So, if you’re reviewing your sourcing footprint this year, don’t look at the map to begin with.

Start with your commitment curve:

• What must be locked in early?
• What needs to stay flexible for longer?
• What breaks when or if you change your mind?

If you can answer those, it will be considerably easier to figure out your next move.

And if this resonates but your current systems make staged buying difficult, we’d be happy to share how K3 Fashion supports step-wise buying in practice.