For Peloton and new customers, this store should be a win-win as the company could easily sell them for $1,500 after a $700 trade-in. While this margin remains somewhat near the margin they saw last quarter, it will be a way for Peloton to bring in new customers at an even lower cost. For customers, this will be a way to join the Peloton ecosystem for less.
Shipping times for a pre-owned bike might also be much lower than a new bike as there is no production to account for. What’s still unknown is what is involved in the “certified” process.
The pre-owned store has not opened yet, nor do we know pricing or warranty information, but it will be a great opportunity for Peloton to expand the price points for hardware. It could also be a way Peloton could tinker with pricing and promotions without affecting its core products. On the earnings call, it was said that Peloton expects their original bike to remain their best-selling product.