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Peloton to ruin the secondhand market by charging a $95 ‘used equipment activation fee’ | It doesn’t apply to refurbished models bought directly from the company (www.engadget.com)

submitted 2 months ago by ForgottenFlux@lemmy.world to c/technology@lemmy.world

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Peloton is in something of a financial rut lately, and we all know what companies do when that happens. They take it out on consumers. To that end, the exercise machine maker just announced it will be charging a $95 “used equipment activation fee” to anyone who buys one of its machines on the secondhand market, according to a report by CNBC.

The company made this announcement in its Q4 2024 shareholder letter. The fairly exorbitant fee will apply to any machine bought directly from a previous owner, meaning anything purchased via Craigslist, Facebook Marketplace or, heck, even a neighbor down the street. Without tithing $95 to the church of Peloton, the machine won’t have access to any of the classes or features the company has become known for.

The company says this activation fee is just to ensure that new members “receive the same high-quality onboarding experience Peloton is known for.” In a recent earnings call, however, a company representative was more transparent, calling the fee a “source of incremental revenue and gross profit,” according to The Verge.

The standard Bike, for instance, sells new for nearly $1,500, but you can pick up a used one online for $300 to $500. Now, that price goes up to $400 to $600. Peloton also requires a monthly membership fee to access content, which is around $44.

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[–] irotsoma@lemmy.world 3 points 2 months ago

The whole reason the product is so expensive is the online services. And if the first person paid the price for that, then no one should be required to pay for just changing hands. Problem is that it was priced with the idea in mind that most people who bought the product would quit using it after a short time and that concept was the basis of their profit. It's a bad, short term strategy designed to generate short term profit at the expense of long term profit which only benefits investors. And this leads to the main problem with the current system. The end-user is no longer considered the customer, investors are.