Used Peloton purchase necessitates a $95 activation fee payment

Peloton, the popular fitness equipment company, has announced a new policy for customers buying secondhand bikes. As of now, consumers who purchase used Peloton bikes from private individuals will be required to pay a one-time activation fee.

The activation fee, set at $95 USD or $125 CAD, is an additional cost on top of the price of the bike and the monthly membership fee. This policy applies to purchases made in the U.S. and Canada, but does not extend to purchases made through Peloton-owned channels or third-party distribution partners, including refurbished bikes.

The move comes as Peloton aims to ensure that new members receive the same high-quality onboarding experience as those who buy new bikes. Secondhand members will also receive a virtual custom fitting and a history summary on their pre-owned equipment.

The company views the secondary market as an important channel and plans to continue improving the member experience. In addition, Peloton offers discounts on accessories, like bike shoes, bike mats, and spare parts, to secondhand members.

The decision to introduce the activation fee is part of Peloton's strategy to generate incremental revenue and gross profit, as stated by interim co-CEO, Christopher Bruzzo.

The high price tags of new Peloton bikes have led many consumers to scour secondhand sites for cheaper options. The starting price for a new Peloton bike is $1,445, while the starting price for a new Peloton Bike+ is $2,495. Refurbished Peloton bikes purchased from the company or third-party distributors are exempt from the activation fee.

Peloton's segment of business involving secondhand customers has seen a 16% increase compared to the same period last year, indicating a growing demand for used Peloton equipment. This new policy is expected to further boost Peloton's revenue from the secondary market.