- Peloton is introducing a $95 “used equipment activation fee” for bikes purchased from outside its official channels in the US and Canada, aiming to boost revenue and maintain onboarding quality for new subscribers.
- The fee has sparked criticism as it reduces the cost savings typically associated with buying secondhand equipment and diverges from practices in other industries, potentially discouraging used market purchases.
- Peloton’s hardware sales continue to decline, but subscription revenue has seen slight growth; the company still faces financial struggles despite cost-cutting measures and layoffs.
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32 points
This is basically admitting that consumers don’t actually value their subscription service for the cost. If users were buying used bikes and signing up for subscriptions Peloton would be thrilled, they would do everything that they could to encourage that like free trials. But it must be that most people who buy used bikes don’t find the subscription worth it and cancel within a few months. Adding this fee both extracts more money and creates a sunk cost fallacy that will cause them to go longer before cancelling.
If the product sold itself they would just let people pay them subscriptions, its basically free money.
