LPD Music International

Fielding an impressive lineup of popular brands, LPD Music International (www.lpdmusic.com) prides itself on offering the benefits of the "big" distributors, but with the human touch of a smaller organization. "One of the things I've heard about other distributors is that the larger ones are all about automated phone lines and so on," notes Sonia Vallis president and CEO. "If you call LPD5 you'll always get an actual person on the line. I think being smaller sometimes can be a benefit because we're more accessible, there's less red tape and we try to be very flexible with our dealers.

"We also have a tremendous sales staff which is another major asset. They're all very knowledgeable and we don't have a lot of turnover here - most of our guys have been here for over ten years, plus they're all musicians. Our sales team is quick thinking and can answer questions right away."

Changing with the Times

With the continuing evolution of online sales and shifting distribution models, LPD has had to effectively react to emerging trends.

"In the industry overall, there's a lot of consolidation taking place," observes Sonia. "Now there's competition from video games, the Internet, plus there's lack of music program funding in schools. . . When I was younger, kids used to idolize Stevie Ray Vaughan or Eddie Van Halen or Aero smith - they were much more into playing instruments, whereas now they go on Facebook. That's a challenge for us and for everybody in the business.

"Specific to LPD, in the role of a distributor, a lot of the manufacturers are streamlining by selling direct, they have large-volume requirements or are selling to a few, select distributors. In some cases, we've been amongst those that are chosen; in others we haven't been."

Vice president Tom Vallis adds, "What we're finding, of course, with the Internet and competition, is that profit margins with certain product lines are really being affected, specifically, maybe, in the pro audio field, for example. Those eroding profit margins are forcing us to really look at the lines we're carrying and, if it's something where we can no longer provide a service to our dealer, we're basically discontinuing some of those lines and looking for other opportunities. It's one of the unfortunate affects of the current economy, but we have to focus on changing to continue to benefit our dealers."

Thriving, not just Surviving

One way that LPD has managed to stay one step ahead of the curve, even in an ever-changing MI landscape, has been through the development of their own brands.

"It's been very important for us to develop our own line of products," says Sonia. "Fortunately we've been able to be very successful at doing that. We started with Paracho Elite, which used to be Lone Star Guitars. We began with Lone Star back in 2000 or 2001 and re-branded it around 2006. The reason for that change was that wood prices were increasing and, due to having to compete with China and all that, we just decided to focus on key models within the product line and make our instruments that were already great even better. So we raised the prices a little bit to account for the increase in wood prices and focused more on making them a little more detailed in the design element. We figured we should change the name, so as to make clear the distinction between some of the older Lone Star instruments from before we took over the line. Also, so many people are familiar with the city of Paracho. It's a guitarmaking town, which is really neat and we wanted to represent this city and the culture. Lone Star is much more referring to Texas, which is fine, but in this case misleading since the instruments are made in Mexico.

"We also brought in Italia Guitars around the same time frame. They're these retro, c60s-looking guitars, which is something that I think was missing in the industry. There are so many similar designs out there in guitars and we thought that something fresh and interesting that hasn't been done, so we brought in the line and that further helped increase our business. We had a lot of artists who actually asked to play our instruments which is really cool, to have an artist come to you, so we didn't have to seek them out, so the Italia line really helped us a lot.

"More recently, we've done Line 6 and Danelectro which have been huge for us." LPD benefits from degrees of exclusivity with those two recent additions, as Tom explains: "We're exclusive with Danelectro, so any dealer who wants to purchase Danelectro guitars [Danelectro pedals and accessories are available through other outlets] has to purchase them from us. With Line 6, we are their only distributor - the difference is that they do have a direct dealer base. Unless you're a direct dealer, you have to purchase Line 6 pods and accessories through LPD."

And, as Sonia notes, the organization continues to actively pursue other partnerships and developments: "We're always looking for new lines, as well as trying to increase our other lines."

Continued Relevance

For Tom and Sonia, there's no question that the MI distributor still represents great upside for dealers, even in the Internet age.

"The role of the distributor - I still think there's definitely a need for it," she asserts. "A traditional distributor can be one- stop shopping for the small to midsize dealers, for both domestic and import merchandise. I think some of those smaller guys are not big enough to stock everything, so we basically can become a warehouse for them. They don't have to stock it, we can stock it for them and when an order comes in, we can ship immediately. We're here to work with and help our dealers and I think we offer a level of service that sets us apart."

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"A traditiona distributor can be one-stop shopping for the small to midsize dealers."