Peloton to rely more on third-party delivery partners like XPO

This morning, Peloton announced a number of big changes at the company. These included John Foley stepping down as CEO, thousands of layoffs, and more. Peloton also shared that their new device, the Peloton Guide, would officially launch on April 5th.

One of the press releases this morning addressed a “comprehensive program to reduce costs and drive growth, profitability, and free cash flow”.

In their effort to cut down on expenses, Peloton plans to rely more on third party delivery partners like XPO. On the earnings call, it was stated that previously Peloton’s own delivery teams handled around 60% of the deliveries, while partners delivered around 40%. Moving forward, the goal is to have their own teams deliver around 40%, and third party providers deliver the remaining 60%.

Peloton put it this way in the press release:

Peloton will optimize its logistics network by reducing its owned and operated warehousing and delivery footprint, while scaling third party relationships.

Another section of the press release said this:

With regard to operations in the field, the company is reducing its owned and operated warehouses and delivery teams and expanding its commercial agreements with third party logistics providers.

Peloton provided a little more context on the earnings call, which was where they stated they wanted to move from the current 60/40 mix to closer to 40/60.

I do want to make a note that just in terms of our own mix of deliveries versus third party essentially we’re shifting from 60% in-house, to around 40% in-house. So while this is a pretty dramatic move for us, we are keeping owned warehouses in our larger markets where we can drive efficiency throughout the year. So those are really our higher volume markets.

Peloton’s CFO Jill Woodworth did state that they would be working with all of their third party delivery providers to ensure a consistent delivery experience across all providers.

We realize through the outsourcing of our delivery that that may be called into question. But our focus is as intent as it was. And we’ll be working with our third-party providers to ensure that our delivery experience is consistent across the board.

From the information provided on the call, it sounded like Peloton would try to keep their warehouses and delivery teams focused in major metropolitan areas – and then use the third party providers like XPO and others in areas outside of the major cities, and to supplement Peloton’s team as well.


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Chris L
Chris is the founder of Pelo Buddy. He purchased his Peloton in 2018, and has been riding and running ever since. You can find him on the leaderboard at #PeloBuddy.

6 Comments

  • Derek B says:

    Not a good idea! I’ve had the worst experience with XPO. Ordered my tread on 11/15/21 and I still don’t have it. They were at my house on 12/27/21 but the delivery guys weren’t strong enough to carry it. They said it would be delivered in the next week or two and of course I still don’t have. It’s been rescheduled 9 time so far!

  • Nance Hill says:

    Perhaps a typo – Jill Foley isn’t the CFO?

  • Michael says:

    XPO is a disaster. When I got my Peloton bike delivered in NY I made certain that Peloton delivered it, not XPO. Stay far away from XPO. In general a company that uses subcontractors usually doesn’t bode well for customers, from my experiences.

  • Sarah says:

    Michael – how were you able to have Peloton and not XPO deliver? I have had a horrible experience with XPO two times now delivering my tread and a replacement part and it now needs to be fully replaced. In addition, they destroyed our walls as they brought the boxes into our house, and I am worried the same will happen on the next delivery. Did you call Peloton to request that XPO not deliver the product? I was told by Peloton that they have no control over who delivers, so I would appreciate any advice!

  • Kerry says:

    XPO is absolutely terrible and is no longer welcome at my house. I’m currently working with Peloton to see if they are able to assign a different delivery and installation team since XPO has failed three times and we’re left with a broken Tread in its boxes in my garage, blocking access to a vehicle.

    Everyone a Peloton is very pleasant to speak with but nobody is empowered to actually make anything happen. Finally today I was connected with someone who agreed to a full replacement Tread but is still working on finding another installation partner. If not, our order will be canceled. There is zero chance I will allow XPO into my house again after this experience.

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