What is nearshoring and why is it important?

If you are a businessman, knowing what nearshoring is and its importance is for business today is a priority for you to evolve. So, take the details; keep reading.

Nearshoring is…

First, it is necessary to know what nearshoring is to understand it and put it into practice within your business. Nearshoring is the opposite of offshoring. The second is about transferring business or technological processes from your company to other companies located in very distant areas to lower costs.

Nearshoring, on the other hand, offers to provide these services to neighboring or bordering countries to the country that is the contracting party. Next, the benefits that this business mode has will be enunciated.

The advantages offered by nearshoring are diverse; the most important thing about the proximity between countries is:

You must get the most out of working with third parties in the countries that border yours. Without a doubt, this will help you in the growth and productivity of your company.

Since nearshoring is a commercial transaction at a distance, research has been conducted to determine which industries it can benefit the most. The following would be the ones that would have more opportunities for expansion and good results:

Nevertheless, more than nearshoring is required for these industry sectors. Any company can have suppliers within nearby countries with the logistics to carry it out.

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Only one Latin American country does not have the same language as the rest (Brazil). In addition, there are quality technical services at low prices in Latin America. It is because life is less expensive in these countries, and the value of currencies is the same.

Therefore, for the United States, for example, applying for nearshoring with the Latin American countries closest to it dramatically helps to expand its business at much lower costs without lowering quality.

It represents excellent benefits for all the countries involved but, above all, for Latin Americans. A law firm that has studied the economic implications of nearshoring for LATAM says (according to Biz Latin):

“…it could increase the region’s exports of goods and services to 78 billion dollars, with the Central American and Caribbean economies benefiting the most…”. The IDB (Inter-American Development Bank) has made these economic projections. So, as you can see, nearshoring can open big doors.

In recent years, different events have been taking place that has hit the world economy hard. The 2020 pandemic (COVID-19), the ongoing Russia-Ukraine war, and ongoing China-US tensions are among them.

Consequently, negotiations through nearshoring allow the business to be expanded between neighboring countries and increase profits effectively at a better price. In addition, the proximity between countries helps streamline all processes. The cost-benefit-quality combination makes it the ideal business style.

At Looper, we offer what real nearshoring is

For us at Looper , cooperation is the primary basis to meet the objectives with the best cost-quality benefits. For this reason, nearshoring is a highly positive form of business that will bring significant income and other advantages to LATAM. Mexico is one of the luckiest countries in this regard for sharing a border with the United States.

Nearshoring means prosperity, evolution, cooperation, and effectiveness for integrated countries. For example, for North American companies, it is advisable to hire dealers at a lower cost without this being detrimental to the quality of the product or service to be distributed. And for Latin America, these economic incomes are essential for its evolution.

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