In the tech industry, Lotus endured one of the stormiest half-decades. In a dizzying sequence, the home fitness company went through some of the greatest highs and lowest lows in the business. It tells the tale of a popular startup that attracted a cult-like following among fitness enthusiasts and influencers. The brand was propelled to unprecedented heights by a worldwide pandemic, but excessive spending, recalls, widespread layoffs, and the departure of executives brought it tumbling back to earth.
Peloton is out, but not out, as of mid-2024. The company’s large-scale debt refinancing at the end of May helped it avert a significant liquidity crisis. That concluded a month that also saw the firing of CEO Barry
McCarthy, who had been with the company for just over two years, and a 15% personnel cut.
immelfeld began a pilot for what would become Trade My Spin last year, picking up and selling used Peloton equipment. At its heart, the offering was a DIY logistics play, removing the friction from buying and selling used exercise equipment. It was a conversation with Joey Benjamini that transitioned the one-man operation into a viable business.
Benjamini built contractor-based logistics network for Collectible Classics. His Pennsylvania-based vintage car dealership relies on those contracted drivers to deliver vehicles primarily sold through used car platform, Bring a Trailer.
“Logistics are the most complicated and the most important part of this business — and the biggest barrier to entry,” Benjamini tells TechCrunch. “We have a database of 1099 contractors who do deliveries for us. We’re constantly growing that network of drivers who know our company and our process. Once a driver is trained, we dispatch them to pick up bikes. It’s very simple.”
The new team began work on the Trade My Spin site prior to seeking funding. The page remains simple, even as the inventory has grown to include Peloton’s treadmills, rower and a variety of accessories. A Buy button displays the service’s bustling marketplace, while Sell surfaces a form for the equipment you’re looking to unload. With the site in place, the young company raised a small pre-seed to scale operations.The startup has also had multiple conversations with Peloton since officially launching in March. Trade My Spin’s primary goal with the calls is convincing that theirs is a symbiotic – rather than parasitic – relationship. At first glance, it’s easy to understand why Peloton might be antagonistic toward the company.
Viewed as a zero-sum game, every used bike sold represents a potential lost sale on a new bike. While it’s true that keeping bikes in circulation is a net positive on the sustainability front, Peloton shareholders are no doubt looking at the sales bottom line in hopes of seeing a turnaround.
he math changes, however, when considering that Peloton’s ultimate goal is being a content company that sells hardware, rather than the other way around. Rather than simply ever used bike sale as a missed sale on a new one, Trade My Spin’s pitch is that every bike removed from circulation is one fewer subscription to Peloton’s content platform of classes.
“Every bike we take is from someone who is not using that bike,” says Benjamini. “If someone’s not using the bike, they’re not using the subscription. Peloton is a subscription service. It’s $44 a month. Every time we flip a bike – and we’ve flipped thousands of bikes – they make $500 a year.”
The relationship would no doubt be different had Peloton been more proactive about moving its own used
equipment. Ultimately, however, Trade My Spin stepped in to fill that underserved hole in the market.
Trade My Spin has pieced together a logistics network capable of offering same or next-day delivery in most major cities in the continental U.S. More-remote locales can take up to five days to complete, which is still faster than the three to five days Peloton takes to process orders.
In the short term, expansion involves adding more fitness equipment to Trade My Spin’s buying and selling options. Longer term, the company is looking to leverage its growing network of contractors to include the buying and selling of all sorts of unwieldy objects. Trade My Spin will likely require an additional funding round to get there.
“We want to transition,” Benjamini says. “We take it from where we’re currently at, and we build it into a large-scale marketplace for bulky items with logistics. That’s the game plan, and no else is going to do that. There’s a barrier to entry and a moat around the business with regards to having the drivers.”
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