Peloton Developing DIY Assembly Bikes in Cost-Cutting Measure

On a September 2020 earnings call, Peloton co-founder and former CEO John Foley vowed that the connected fitness company “won’t cut corners when it comes to product quality or delivery standards.” 

Now, in an effort to return to profitability, current CEO Barry McCarthy told Bloomberg that Peloton could soon offer a bike that won’t require professional delivery and setup — one of the cost-cutting measures the company has explored. 

“We’ve been working on it for a while, and it’s a real thing,” McCarthy said. “We’ll continue to cost-reduce the hardware, and we will engineer it so that you can assemble it, so that we can ship it via FedEx.”

• McCarthy announced the measures in a letter to employees stating Peloton would fully outsource delivery and setup. 
• Employees who handled the task previously were among the nearly 800 layoffs, which McCarthy noted would cut delivery costs in half. 

Do-it-yourself bike assembly would also make it easier for Peloton to push into new markets — a logistical challenge with the two bikes the company currently offers, which require professional assembly. 

Row Row Row

Peloton is nearing the release of its long-anticipated rowing machine.

“We’re hopeful to have it for the holiday season,” McCarthy said.

The company is also exploring another revenue stream: allowing people to access its classes and other content on competitors’ workout machines.