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Consumers who purchase used Peloton exercise machines in the United States and Canada will be required to pay a “Used Equipment Activation Fee.”
The fitness company, which reported its fourth-quarter earnings on Thursday, revealed that it will begin collecting a new one-time fee from people who buy Peloton equipment from a previous owner through secondary sales that aren’t made through “Peloton-owned channels or third-party retail partners.”
The Used Equipment Activation Fee will be $95.00 in the United States and $125.00 CAD in Canada.
Brody Longo straps his feet into the pedals of a Peloton exercise bike before a workout on April 16, 2021 in Brick, New Jersey. (Michael LoCcisano/Getty Images/Getty Images)
Peloton said secondary market buyers can get a good deal on Peloton accessories by paying an activation fee.
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The fitness company says those who pay for the Bike or Bike+ will also receive a “virtual custom fitting” and an overview of their equipment’s history to help them “get the most out of their first ride.”
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| P-ton | Peloton Interactive, Inc. | 4.55 | +1.19 |
+35.42% |
“While these secondary market sales are not made through Peloton-owned channels or third-party distribution partners, we want to ensure that these new members receive the high-quality onboarding experience Peloton is known for,” Peloton said.
A Peloton exercise bike after the opening bell for its IPO on the Nasdaq market in New York City on September 26, 2019. (REUTERS/Shannon Stapleton/File Photo/File Photo/Reuters Photo)
The company also sees the secondary market as an “important channel” for it.
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“The secondary market is a significant subscriber source for our company and continues to generate a steady stream of paid connected fitness subscribers, growing 16% year over year in the fourth quarter,” said interim co-CEO Chris Bruzzo.
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Peloton reported that subscribers who buy used equipment have a “lower net churn rate” compared to subscribers who rent equipment.
The running deck of a Peloton Tread treadmill is displayed at CES 2018 at the Las Vegas Convention Center on January 11, 2018 in Las Vegas. (Ethan Miller/Getty Images/Getty Images)
“We remain committed to this important channel and look for additional ways to enhance the experience for our new members,” Bruzzo said. “It’s also worth highlighting that this initiation fee will be an incremental source of revenue and gross margin for our members, supporting our investments in enhancing the fitness experience for our members.”
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The company reported 2.997 million paid connected fitness subscriptions and 828,000 paid app subscriptions at the end of the fourth quarter, bringing its platform total to 6.5 million members.
Peloton’s lineup of exercise machines includes bikes, treadmills and rowing machines.
