Peloton's New Resale Platform: Smart Business Move or Operational Nightmare?
Peloton launched "Repowered," a resale marketplace for used fitness equipment where sellers retain 70% of the sale price while Peloton and platform provider Archive split the remaining 30%. The platform uses AI for pricing suggestions and aims to capture value from the secondary market, though experts worry about Peloton's operational execution track record.
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Transcript
Peloton is launching a resale market for used bikes and treadmills.
Speaker A:According to cnbc, Peloton has launched its own secondary marketplace called Repowered to get a slice of the burgeoning resale market for connected fitness equipment.
Speaker A:Beginning last Tuesday.
Speaker A:People in select cities can now list their equipment and gear for sale and Repowered and set their own price with the help of a generative AI tool sellers will get 70% of the sale price and the rest will be shared between Peloton and the platform platform provider Archive.
Speaker A:Repowered is launching first in beta in New York City, Boston and Washington, D.C.
Speaker A:with plans to go nationwide in the coming months, Peloton said.
Speaker A:Chris, this is also the AM put you on the spot question A and M wants to know, is skipping the heavy lifting worth the 30% selling fee or will Peloton fanatics stick to using other places for selling their products like Facebook Marketplace?
Speaker B:Interesting, interesting question.
Speaker B:I think, yeah, I think it's probably worth it.
Speaker B:I think there's a, there's a segment of the population where if they're in this, they're going to want the extra validity that doing it through the Peloton platform provides.
Speaker A:Like a certified pre owned situation kind.
Speaker B:Of thing, you know.
Speaker B:You know, especially when you think about, you know, who the average demographic is of the current Peloton holder.
Speaker A:Yep.
Speaker B:Or owner.
Speaker B:The thing I would say about this though, as much as I think, as much as you, as I think when reading the headline, I wanted to like this headline.
Speaker A:Yeah.
Speaker B:I think I'm a little cautious on this.
Speaker B:Like I think I would, my thing would be I would go very slowly with this.
Speaker B:It's only in select cities right now, as you mentioned, and I think the dynamics of, you know, making this successful in places like Boston and New York City are very different than a nationwide rollout, which they're already saying they're going to do.
Speaker B:So that worries me a lot, especially given Peloton's operational track record.
Speaker A:Right.
Speaker B:Because the dynamics of delivering those cities are very different than say Yuba City, California, shout out to my friends in Yuba City, which I do have.
Speaker B:So that, that's the one caveat here.
Speaker B:I'd say I'd say good idea.
Speaker B:But I would go slower at this than you're reporting to, especially when you're dropping things like AI into this headline too.
Speaker B:It makes me think you're trying to gin up some excitement about something.
Speaker A:Anyone who's used any resale platform realizes that whether you're reselling like, you know, video Games or clothing.
Speaker A:Like everybody, it automatically uses generative AI to give you a suggested price for.
Speaker B:Your product or quote unquote, an algorithm.
Speaker A:Yes, exact.
Speaker A:So yes, that's for sure sizzle.
Speaker A:But I do think that there's some opportunity here.
Speaker A:Yeah, you're Peloton market than I am.
Speaker A:Here's the problem that I have.
Speaker A:And you called it out brilliantly.
Speaker A:They should go slow and they need to figure out exactly how this is going to work.
Speaker A:As someone who's purchased a used after aftermarket peloton.
Speaker A:Is that what you call it?
Speaker B:That's right.
Speaker B:Yeah.
Speaker A:I purchased one on Facebook Marketplace.
Speaker A:I had to get it repaired and the it was a total disaster.
Speaker A:Total disaster.
Speaker A:Peloton essentially told me that they, that I should just.
Speaker A:That I should pay fourteen hundred dollars for a repair, that I needed to have a fourteen hundred dollar repair kit.
Speaker A: can I get a new bike for like: Speaker A:And they said oh yes.
Speaker A:And the guy, the help like so it's stuff like that.
Speaker A:The help desk guy was like oh yeah, I guess we'll figure out how to do this.
Speaker A:And so I would just caution Peloton to make sure that you have all of these scenarios played out and figured out.
Speaker A:But I do think in the long term if they can do that, there's definitely money to be made with extended warranty programs with things like delivery services and keeping your bike drivers and repair people employed more and having more for them to do if they can get more of this community to get on board.
Speaker B:But yeah, but I think you're right.
Speaker B:I mean as you're saying that those are hard businesses on which to make money.
Speaker B:The delivery of heavy, heavy goods and services and that type of hard to make money on that consistently.
Speaker B:And you got to figure that out.
Speaker B:So.
Speaker B:Right.
Speaker B:Yeah.
Speaker B:I don't know.
Speaker B:So.
Speaker B:So we're both kind of like maybe, maybe not on this one.
Speaker A:I think I, I think Peloton's track record isn't giving me a lot of confidence that this is going to be able to be.
Speaker A:That it's thought through enough that they're not going to move before they're ready to just based on how we've seen that company act over the last several years.
Speaker B:Wow.
