Peloton to ruin the secondhand market by charging a $95 ‘used equipment activation fee’
Peloton is in something of a financial rut lately, and we all know what companies do when that happens. They take it out on consumers. To that end, the exercise machine maker just announced it will be charging a $95 used equipment activation fee" to anyone who buys one of its machines on the secondhand market, according to a report by CNBC.
The company made this announcement in its Q4 2024 shareholder letter. The fairly exorbitant fee will apply to any machine bought directly from a previous owner, meaning anything purchased via Craigslist, Facebook Marketplace or, heck, even a neighbor down the street. Without tithing $95 to the church of Peloton, the machine won't have access to any of the classes or features the company has become known for.
The company says this activation fee is just to ensure that new members receive the same high-quality onboarding experience Peloton is known for." In a recent earnings call, however, a company representative was more transparent, calling the fee a source of incremental revenue and gross profit," according to The Verge.
Users who pay this fee will be treated to a virtual custom fitting," in the case of the Peloton Bike and Bike Plus. They will also receive a summary of the hardware which will illustrate exactly how much the machine was used by the original owner, just in case the seller tries that whole I only used it once" thing. Peloton also says that these second hand buyers will get discounts on accessories like shoes, mats and spare parts. So it's not all bad.
Also, the $95 fee doesn't apply to those who buy refurbished machines directly from the company or from any of its third-party distribution partners. It's only those who sell or buy via traditional used equipment channels who gotta pay the troll toll.
Buying a preowned Peloton machine was one of the great joys of being a consumer. The standard Bike, for instance, sells new for nearly $1,500, but you can pick up a used one online for $300 to $500. Now, that price goes up to $400 to $600. Peloton also requires a monthly membership fee to access content, which is around $44.
This isn't the only move that Peloton has recently made that could be seen, through a cynical lens, as nickel and diming consumers. It upped subscription prices for those who use the company's app with third-party machines. There's still a free tier, but it doesn't offer access to any live classes.
However, the recent earnings call did offer a bit of good news for Pelo-heads (I just made that up). Shares have risen 15 percent this quarter and losses have been narrowed to $30 million, down from $241 million year over year.
This article originally appeared on Engadget at https://www.engadget.com/home/peloton-to-ruin-the-secondhand-market-by-charging-a-95-used-equipment-activation-fee-155230509.html?src=rss