Peloton has announced today they will be adding a “used equipment activation fee” in the US & Canada.
This new (one-time) used Peloton activation fee will be $95 in the US, or $125 CAD in Canada, and will apply to Peloton hardware that is purchased through a third party reseller.
You will pay this fee to Peloton as you try to activate your device and sign up for your All-Access monthly membership fee with Peloton.
Peloton is implementing this new fee effective immediately. It applies to the Peloton Bike, Bike+, Tread, Tread+, and Row. The Peloton Guide (which now has a retail price of only $95) is excluded from this used activation fee.
For Bike & Bike+ owners, Peloton is going to start including a virtual bike fitting as you activate your product. Peloton is also offering discounts on accessories, spare parts, and more. All of this will be done through a “Virtual Product Onboarding” that will be run through Peloton’s retail team.
These discounts include a $25 spare part credit, as well as a 50% off coupon for Peloton cycling shoes and a mat.
Peloton describes this as:
During the Virtual Product Onboarding, Members can expect to be welcomed to the Peloton community by one of our Retail team members as they provide a custom overview of a Member’s Peloton equipment. The Retail team member will highlight exciting product features and content offerings, provide an overview of useful fitness accessories, and listen to Members’ fitness goals and interests to suggest classes and instructors. There will also be time for the Retail team member to answer any additional questions about the pre-owned product.
In the statement announcing this new fee, Peloton pointed out they have built tools like the history summary tool to view stats on their used equipment.
The statement and press release about this new fee initially describe it in the context of enhancing the customer experience, saying that the fee will “ensure these new Members receive the same high-quality onboarding experience Peloton is known for.”
However, this change was announced as part of Peloton’s quarterly investor letter, and follows the letter talking about about how the “secondary market continues to deliver a steady stream of paid connected fitness subscriber additions, up 16% Y/Y in Q4.” Peloton does go on to explicitly state that a goal of this is to drive revenue for the company, saying that they see it as “contributing to the company’s long-term growth and sustainability.”
Currently, Peloton does not receive any money from any used Peloton equipment sales (outside of the Peloton refurbished program) – other than any subscription revenue from a device continuing to be used. This new fee is a way for them to get a little extra money each time a used device is sold and reactivated.
Peloton does clarify that this fee will apply to “secondary market includes sales channels that are not owned or managed by Peloton or Peloton third-party distribution partners. Examples include Facebook Marketplace, Craigslist, Reddit, and other Member-managed sales channels.”
This should not apply to refurbished bikes purchased directly from Peloton – as that is a channel owned by Peloton. Peloton also clarifies that this doesn’t apply to the Peloton Rental program (and goes on to state that rental bikes can’t be resold either).
Do you think this new fee might impact people’s decisions on whether, and from where, they purchase Peloton equipment?
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