Many people try to overcome adversity by combating the problem. However, some conditions are too strong to defeat, no matter how great a fight we put up.
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Peloton has found the solution to a troublesome problem within its business. After years of trying to fight it, it decided to follow the motto “if you can’t beat them, join them.”
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Peloton’s (PTON) business model boomed during lockdowns, reaching its highest-ever sales, subscriptions, and shares peak.
However, once the confinement period ended and gyms began to reopen, the need and demand for at-home workout equipment declined. This has caused Peloton’s business to struggle since 2021.
Peloton launches the solution to a major problem.
Image source: Peloton Interactive, Inc.
Peloton flags a worrisome consumer problem
Not only do consumers not depend on Peloton’s equipment and subscriptions like they once did, but the pandemic’s aftermath also led to an overall slowdown in consumer spending due to economic uncertainty that continues to impact its business.
During its third quarter of fiscal 2025, Peloton’s overall membership declined 8% year over year.
Paid Connect Fitness subscriptions required for Peloton equipment were down 6%, and equipment sales declined 27% yearly, marking the third consecutive year of year-over-year sales declines.
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Peloton has previously stated that, in addition to the current consumer slowdown, unregulated resale platforms were also a factor in declining sales across all equipment categories, since they offer lower prices, taking away market share.
The company has tried to combat this problem by implementing a one-time $95 activation fee for all secondhand equipment, yet the efforts haven’t been enough.
The popularity of these unregulated resellers has been so significant in Peloton’s business that the company forecasted equipment sales would continue declining for the remainder of fiscal 2025.
However, Peloton said it would focus on price optimization and promotional strategies to reverse these declines.
Peloton finds a solution to a growing problem within its business
Sometimes, the competition is too great to try to eliminate, so Peloton decided to play along, but by its own rules.
Peloton has teamed up with the developer Archive to launch Repowered, a secondary marketplace where customers can resell and buy used equipment and gear from the brand.
This new platform implements an AI tool to provide sellers with suggested product prices based on factors such as year, condition, and type. However, sellers can still set their listing price within a range, while buyers can see the products’ history.
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The marketplace is a win-win for all involved because sellers will receive 70% of the sale, and Peloton and Archive will split the other 30%.
Sellers will also get a discount of up to $600 that can be applied when buying new Peloton equipment and gear, and the buyer activation fee will be reduced from $95 to $45.
Once the products are purchased, buyers can arrange a pickup with the seller or have the products delivered for a fee.
Currently, the platform is only open for listings from sellers in the Boston, New York City, or Washington, D.C., metro areas. Once enough products have been listed on the marketplace, buyers will soon be able to make purchases.
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