Peloton on Tuesday launched its own marketplace for reselling used equipment and gear as the company looks to capitalize on the many bikes and treadmills collecting dust in people’s homes.
The platform, dubbed Repowered, will allow members to post listings for their used Peloton equipment and gear and set a price with help from a generative AI tool, the company said.
Sellers have the final say on how much to list the item for, but the AI tool will suggest a price based on information about the product, such as its age, Peloton said.
It said sellers will get 70% of the sales price, while the rest will be shared between Peloton and its platform provider, Archive. Sellers will get a discount toward new equipment, while buyers will see the activation fee for a used product drop from $95 to $45, the company said.
Buyers will be able to see the equipment’s history on the listing and have the option to get the item delivered for an extra fee, Peloton said.
The resale market for used bikes and treadmills is booming. The company said it wants to streamline the sale process for members and offer a safe and comfortable way for prospective customers to buy equipment. It’s also an opportunity for Peloton to reach a wider array of new users as it plots a pathway back to growth.
Last summer, Peloton said it had started to see a meaningful increase in the number of new members who bought used Bikes or Treads from peer-to-peer markets such as Facebook Marketplace. At the time, it said paid connected fitness subscribers who bought hardware on the secondary market had grown 16% year over year, and it believed those subscribers exhibited a lower net churn rate — or membership cancellation — than rental subscribers.
Peloton has plenty of enthusiastic fans who use the company’s equipment every day, but some people have likened it to glorified clothes racks because so many people stop using them. While those owners paid for their exercise machines when they bought them, many have canceled their monthly subscription, which is how Peloton makes the bulk of its money, according to the company’s financial records.
Peloton is already reaping the subscription revenue from people who bought hardware on the secondary market, but now it will get a cut of that market with little upfront cost.
Repowered is a direct challenger to not just Facebook Marketplace but also the burgeoning startup Trade My Stuff, formerly known as Trade My Spin, which sells used Peloton equipment.
Trade My Stuff founder Ari Kimmelfeld told CNBC he previously met with Peloton to discuss ways to collaborate.
But Peloton said Repowered isn’t connected with Trade My Stuff.
Repowered is launching first in beta in New York City, Boston and Washington, D.C., with plans to go nationwide in the coming months, Peloton said. The platform will launch first to sellers, and once there’s enough inventory available, it’ll go live to buyers, the company said.