Considering buying a used Peloton machine? Well, customers in the U.S. and Canada must now pay a one-time “used equipment activation fee” of $95 (or $125 CAD).
Peloton announced the news in its fourth-quarter 2024 shareholder letter. This fee does not apply to refurbished models that you purchase directly from Peloton or its third-party distribution partners. The company clarified during its earnings call that the fee will apply to people who purchased a Peloton machine directly from the previous owner.
The official reason given is to allow new members to “get the same high-quality onboarding experience that Peloton is famous for.” That may be true, but the fee is also a way for Peloton to get a cut of used hardware sales. During today’s earnings call, the company itself said the fee would also be a “source of incremental revenue and gross margin.” For users, the fee will include virtual customization of accessories for Bike and Bike Plus customers, as well as a history summary of used hardware. Peloton said it will also expand discounts on cycling shoes, pads and spare parts.
The obvious appeal of buying a Peloton from a used car is the cost savings. On Facebook Marketplace, you can easily find used Peloton bikes in the $300 to $500 range. (The regular bike retails for $1,445.) Private Facebook groups, such as Peloton Buy Sell Trade, are also popular. Second-hand buyers will still have to pay a $44 monthly membership fee to access Peloton content, but considering Peloton hardware is expensive for the category, the initial savings are substantial.
Beyond that, Peloton’s earnings call was more promising than the last time, when CEO Barry McCarthy resigned amid another round of layoffs. Peloton shares rose more than 15% on signs that the company is working to reverse its poor fortunes, with sales rising slightly and narrowing losses to $30 million from $241 million in the same period a year ago.
