When Steve Edwards Jr bought a new Peloton bike in 2020, his life looked pretty different. He had just received a stimulus check from the federal government and was spending most of his time at home. But lately, busy with an infant son and an in-person job at his family's grocery chain in Little Rock, Arkansas, he and his wife barely use the bike.
"We used it a ton during Covid," Edwards, 27, said. Now, though, "we use our free time to do things other than working out", After tucking the bike in a corner of the living room, he moved it upstairs to a spare bedroom. "We have not utilised it enough to warrant the space it takes up," he said.
Edwards posted his Peloton for sale on Facebook last week, offering the bike, along with weights, two sets of shoes and a mat from Peloton, as well a sheet of plywood he bought to stabilise the bike on a carpet, for US$1,300. (Edwards said he had spent more than US$2,000 for the entire package from Peloton, including delivery.) He has not gotten any interest from potential buyers so far.
Peloton has offered a cautionary tale about quickly changing consumer habits. At the height of the pandemic, its business soared as gyms shuttered and Covid restrictions kept people at home. But many who bought Peloton bikes at their peak popularity are now returning to gyms and busy schedules, and some are regretting what might be their most expensive pandemic-era purchase. Sites like Facebook, Craigslist and eBay are flooded with posts offering used Peloton bikes, shoes and weights.
At the same time that many consumers are trying to sell used equipment, Peloton is looking to sell used inventory as well. In August, Peloton ran a 10-day test of its certified pre-owned bike programme, which allowed consumers to buy second-hand bikes through the company. On a call with analysts last week, Barry McCarthy, Peloton's chief executive, said the programme was a top priority for the business.
The focus on resale comes as Peloton's sales continue to plummet. Last week, the company reported a US$1.2 billion quarterly loss. It has lost money for six straight quarters. McCarthy, who stepped into his role in February, is working to cut costs and earn a profit. In recent months, the company has slashed jobs and closed stores. McCarthy has said reaching "value-minded" consumers, including by reselling used bikes, will be key for the company's growth.
But it's competing with a crowded third-party market. Christine Bass, an avid Peloton rider and a moderator of the Facebook group "Peloton Buy Sell Trade", which has more than 200,000 members, has seen an increase in posts selling bikes this summer and noticed that posts selling bikes for US$600 or US$700 often get a lot of interest. Bass said that earlier in the pandemic, when customers faced long delivery delays for new Peloton bikes, people were listing used bikes on Facebook for thousands of dollars - sometimes at higher prices than new ones.
Now she sees people post: "I'm using it as a clothes hanger. Need it gone now!"
On eBay, sales of Peloton bikes increased 80 per cent between July 2020 and July 2022, according to a spokeswoman for the site.
Peloton has been exploring a resale programme for some time. John Foley, its former chief executive and a founder of the company, said on a call with analysts in September 2020 that Peloton was planning to offer a certified pre-owned option in the future. The company moved forward with plans to buy back customers' bikes, offering them a US$700 credit toward a Bike+, which is an upgraded bike with additional features, as well as other incentives, like free pickup and a yoga set. Then in November that year, Foley told analysts that the company did not have enough inventory to move forward with a certified pre-owned bike programme at that time. He said fewer people than expected had sold back their bikes.
Peloton paused the trade-in programme this past June.
"It's in Peloton's interest to try to control the secondary market," said Sucharita Kodali, an analyst at Forrester. By buying back equipment, Peloton takes used bikes away from the peer-to-peer market. Then the company can decide when and where to resell them, all while building a direct relationship with new customers and understanding who is buying their merchandise, she said.
When Peloton sells a bike, even a lower-priced used one, it is not just selling a piece of equipment. It is also gaining a potential customer for its all-access workout programme, which costs US$44 per month. Peloton's subscriptions grew 27 per cent over the past year, to about 3 million. (That number is roughly flat from the previous quarter.) A spokesman for Peloton said that the certified pre-owned programme was meant to reach customers with both its equipment and its software.
Subscribers are paying Peloton the same recurring fee, Kodali said, whether they are riding a new model or a used one. "That fee is very lucrative because it's very scalable," she said. McCarthy said last week that he considered Peloton's content, which includes instructor-led classes and scenic rides, the company's "singularly unique competitive advantage."
A spokesperson for Peloton said the company, having completed its 10-day trial run of the certified pre-owned bike programme, aimed to expand the programme across the country. In the meantime, many customers will continue to turn to third-party sites to offload their bikes.
Not everyone has a tough time selling Peloton equipment: Last month Kaylee Caspers, 22, was able to find a buyer for her used Bike+ in Fargo, North Dakota, within a few days on Facebook. She attributed the quick sale to the apparent scarcity of exercise bikes in her area. When she was looking for a Peloton in 2020, there was "absolutely nothing in the area", she said, adding: "It's definitely not like New York or LA."
But many are having to eat a large part of the cost of their pandemic purchase. In the New York area last month, Olivia Hilton, 27, was able to make a sale after lowering her price to US$1,200 from US$1,500 in a Facebook post.
Hilton, a nurse living on Long Island, bought a Bike+ and accessories in 2020 using a health care worker discount. "I spent three grand on this bike that collected dust," she said.
"I felt a little bit guilty about selling the bike," she said. But she would tell others in her situation: "You tried. Move on. Get the thing out of your house if you don't want it anymore." NYTIMES