The market is absolutely flooded with used bikes. Looking in my area I see two dozen on CL alone within a 30 mile radius for $300-$900 (the $900 guy is delusional.)
Some people will never buy a used peloton, so this doesn't affect them. Some people will never buy a new one, but the bikes have depreciated so much that a used one is a "steal" at 20%-50% of its original cost, they will grumble about, but pay, the fee.
Peloton doesn't care if your used Peloton doesn't sell. That's one less used bike that didn't kill a new bike sale (they need to move new bikes to keep distributors, retailers, and investors happy), and maybe you'll get tired of it being unused and sign up for the service again.
I guarantee they did all sorts of market research before they instituted the policy.
The bigger problem is that they've lost a number of top-name instructors, the CFO is selling stock like it's about to burst on fire, and while they stemmed the bleeding a bit, they're still pissing money down the drain...
> Peloton doesn't care if your used Peloton doesn't sell
Sure they do. People who buy a used bike are not necessarily substitutes for people who will buy a new one. And new ones are more appealing to purchasers if their resale value is high.
I read what you wrote. But that's not how economics works. You don't base your conclusions on actors at the extremes - the people who wouldn't buy a used one at any price (do these people actually exist?) and people who would never buy a new one.
Peloton cares about the price of used Pelotons because they understand that economics regards the decisions made by the marginal consumers - the ones who would buy a new one if the resale value of used ones was $1 higher.
>Some people will never buy a used peloton, so this doesn't affect them. Some people will never buy a new one
But the people that will buy a used one is probably a decently sized market, and those people will still subscribe to pay the company monthly to access the premium features.
Some people will never buy a used peloton, so this doesn't affect them. Some people will never buy a new one, but the bikes have depreciated so much that a used one is a "steal" at 20%-50% of its original cost, they will grumble about, but pay, the fee.
Peloton doesn't care if your used Peloton doesn't sell. That's one less used bike that didn't kill a new bike sale (they need to move new bikes to keep distributors, retailers, and investors happy), and maybe you'll get tired of it being unused and sign up for the service again.
I guarantee they did all sorts of market research before they instituted the policy.
The bigger problem is that they've lost a number of top-name instructors, the CFO is selling stock like it's about to burst on fire, and while they stemmed the bleeding a bit, they're still pissing money down the drain...