The Risks of SMB Nearshoring

The Risks of SMB Nearshoring

Small and mid-size businesses (SMBs) are embracing nearshoring to help address supplier challenges such as unreliable delivery time frames and inconsistent product quality. But switching to nearby suppliers is easier said than done.

Capterra’s latest research reveals that 74% of U.S. SMBs plan to have most or all of their suppliers in North America.

Additional key findings include:

  • 63% of SMBs expect quicker delivery and fulfillment through nearshoring.
  • 54% expect better communication from suppliers.
  • Another 54% expect improved sustainability.

However, switching to nearby suppliers isn’t a quick or easy process.

  • While 85% of SMBs feel most confident in maintaining relationships with existing suppliers, they are least confident in their ability to switch suppliers to make strategic improvements.
  • On average, SMBs report having 27 supplier relationships but nearshored an average of only four suppliers in the past two years.
  • 42% rate price volatility as a top challenge in supplier negotiations.

SMBs should carefully evaluate new suppliers that not only shorten but also strengthen their supply chain.