What Peloton’s Letter to Investors About Upcoming Price Changes Reveals
I’m a loyal user of all things Peloton, from my trusty four-year-old bike to the home-fitness giant’s trusty mobile app , and I’ve happily paid what they charged me for both. But what I paid for my equipment in 2021, and what I’m still paying for my All Access membership now, may be different from what you or I pay in the future.
The brand recently released its fourth-quarter investor letter , hinting at some price changes. They don’t look like they’ll be big, but they’re definitely coming.
“Price adjustments” are on the agenda
One of the most important points in the letter is a promise to focus on “improving monetization,” which falls under the “business improvement” sub-heading. The company says it will become “more creative” in its use of promotions and, most importantly, “adjust pricing to account for [its] costs,” such as shipping, returns, duties, and other fees that Peloton currently incurs.
“For example, we will introduce an additional fee for expert installation services that reflects the true costs of installing our equipment, and we will expand free self-installation to include our Tread and Row products, thereby preserving choice and control for members,” the letter says.
So, it looks like free setup is a thing of the past. When I received my Peloton Bike and Bike+ , which the company loaned me for testing, setup and shipping were free, but in both cases I could have done it myself. I watched the installers work and concluded that with written instructions, I would have had no problem doing what they did, although it was certainly nice to not have to.
The Peloton Bike costs $1,445 , while the Bike+ costs $2,495 . Meanwhile, the Tread and Row, which are expected to offer free self-installation, cost $ 2,995 and $3,295 , respectively. At those prices, it’s not exactly cool to pay to install them when you can do it yourself, especially when you still have to pay $44 a month for the All Access subscription required to use them, plus a bunch of other small costs for accessories and extra gear .
However, Peloton is continuing its special pricing program to make equipment more accessible to teachers, military personnel, first responders, and health care workers. The program currently offers eligible customers up to $600 off equipment and member discounts, but the discount amount depends on your membership in the special group.
Layoffs are also part of the plan.
The same Business Excellence section also revealed a more somber revelation: “Our operating expenses remain too high to invest in the future. Today, we are launching a cost restructuring plan designed to deliver savings of at least $100 million by the end of fiscal 2026 by reducing the size of our global team, reducing indirect costs, and shifting some of our work.”
In other words, layoffs and moves are coming, which we probably could have guessed given the recent closure of so many Peloton showrooms .
Purchase options for you
The letter specifically cites factors like tariffs (which are expected to impact Peloton’s cash flow by about $65 million next year) and a slight decline in paying customers as factors impacting the bottom line. However, the letter also says that Peloton plans to expand its “micro-store” offerings (which are likely easier to service than a massive showroom), increase the number of third-party equipment sellers, and launch “even more differentiated cardio programs” and “fitness and wellness programs.” As someone who already regularly uses a surprisingly wide range of cardio and wellness programs, that’s great news — and a sign that now is the time to invest in more of Peloton’s offerings, especially since we don’t know how much any of this will cost in the future.
If I were choosing new equipment, I would buy it now to be on the safe side and avoid potential price increases for both the equipment itself and its installation. The promise of a higher class makes buying new equipment attractive, even without the threat of price increases.
Don’t forget that you have options if you can’t afford a $2,000-plus bill right now: Peloton has its own new resale platform, Repowered , that lets you buy used units at deep discounts right now. There are also other reputable resale platforms that can help you avoid the danger zones, like Facebook Marketplace and Craigslist.