Author: Kayla James
Peloton Interactive has announced that it will begin selling its bikes and certain accessories on Amazon, breaking a long-standing tradition of selling its products exclusively on its website.
According to a statement issued by the New York-based company on Wednesday, the decision to open a store on Amazon will help Peloton increase its distribution and make its goods more accessible.
In addition, following this revelation, Peloton’s stock soared up to 20 percent in New York, the company’s most significant gain in more than six months.
Peloton and Amazon
Peloton’s Chief Executive Officer, Barry McCarthy, who took the role in February, is attempting to turn around a business that tripled in the early days of the pandemic but has since slowed dramatically. The CEO wants to enhance sales, increase efficiency, and return Peloton to its former glory.
According to analysts, this decision may be beneficial to the corporation. This collaboration with Amazon will expand Peloton’s reach and increase its bottom line. More importantly, it will reduce distribution costs and aid in turning free cash flow positive in fiscal 2023.
In addition, the fitness company is reworking its bikes so that customers can build them at home. It is considering allowing users to beam its materials to compete with other workout machines. All of this is part of the company’s attempt to increase sales.
What other plan does Peloton have?
Peloton revealed earlier this month that it intends to lay off approximately 800 employees, increase product prices, and outsource delivery and some customer service operations. The company also wants to reduce its retail stores in North America beginning next year.
Why did Peloton choose Amazon?
In general, it’s easy to understand why Peloton chose to sell its items on Amazon. After all, Amazon is the undisputed leader in online retail in the United States.
According to Insider Intelligence analysis, Amazon accounts for over 40% of all retail e-commerce sales in the United States this year. Walmart comes in second place with roughly 7%.
According to Kevin Cornils, Peloton’s chief commercial officer, growing the company’s distribution networks through Amazon is a logical extension of the business and an organic means to enhance access to the brand.
Key Takeaways
On Wednesday, Peloton, a fitness brand, announced that it would begin selling some of its goods on Amazon. This announcement is part of the CEO’s goal to increase sales and accessibility to the company’s products. The partnership is part of a larger plan that includes depending on partners to run the firm. CEO McCarthy also has ambitions to outsource its customer service and delivery activities.
In general, we believe that the company’s collaboration with Amazon will help it achieve its goals because Amazon is the largest online e-commerce platform in the United States. What are your thoughts?