Peloton is spending millions to fix its months-long shipping delays
February 5, 2021
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by admin

Laura Sneade Jordan’s Peloton journey sounds like many others’. She and her husband had been thinking about buying the company’s connected bike throughout the COVID-19 pandemic, but they finally decided to buy the $1,895 machine at the end of November in order to have it by Christmas. When they ordered, Peloton said the bike would show up on January 12th — after Christmas, but close enough, they figured. They bought themselves cycling shoes while they waited the seven weeks.

But five days before the set delivery date, Peloton emailed the couple a generic message to say they’d have to keep waiting. The bike had been delayed by seven weeks. The company hasn’t offered them a discount or even a thorough explanation for a delay.

“For the amount of money you’re spending,” she says, the delay felt like an “F you.”

In Peloton’s lightning in a bottle of a year, it hasn’t been able to keep up with demand, and customers are angry. Reports of months-long delays are spilling out onto social media, inundating Twitter and Peloton’s official Facebook group with complaints. Other customers are taking to Peloton’s Instagram comments to vent.

“Canceled our bike due to long delays,” one person wrote. “Would not recommend Peloton. Bad customer service, and constant shipping delays.”

Last month, The New York Times reported on the issue with a Peloton spokesperson telling the paper the “vast majority” of orders had been delivered on time. The company didn’t provide percentages, however.

Part of the problem is Peloton mainly manufactures in Taiwan, a long way away from its US market. And, of course, people are looking for ways to work out at home more than ever before because of the pandemic and stay-at-home orders. The company’s quarterly revenue reached an all-time high of $1 billion this most recent quarter with its total members reaching 4.4 million.

Still, Peloton acknowledged the delays in its earnings report yesterday, saying it was carrying orders over into the next quarter, which were supposed to be delivered already. The company says it remains “inventory constrained with longer than acceptable wait times for the delivery of our products,” and it’s investing more than $100 million in air freight and expedited ocean freight over the next six months to remedy the situation. The company says it’s “hopeful that an acceleration in vaccine distribution and the broader opening of our economy will provide a tailwind to our efforts over the coming months,” although of course, when gyms reopen, the company will face even stronger competition. The company also says it’s now manufacturing more bikes every month than it did in all of 2018.

As part of its solution, Peloton also acquired fitness equipment manufacturer Precor late last year in an attempt to speed up its manufacturing process and bring it stateside. The deal gave Peloton 625,000 square feet of manufacturing capacity along with in-house tooling and fabrication capabilities, product development, and the chance to do quality assurance check, according to the press release. The company would finally start making its connected equipment in the country where it sells most of the units, allowing for faster delivery, although Peloton only said this would likely start “before the end of the calendar year 2021.”

Ryan Lashley, another Peloton customer, tells The Verge he ordered the bike in late October with a quoted eight-week wait time. He aimed to get his order in ahead of the Christmas rush, he says. He sold his rowing machine to make room for the bike, and, as evidence of the demand in home workout solutions, it sold in five minutes on Facebook Marketplace, he says, leaving him without a way to work out.

The day before his bike was set to be delivered, January 13th, XPO Logistics, which fulfills some of Peloton’s orders, told Lashley his delivery needed to be rescheduled. Now it wouldn’t show up until April 3rd. This was the first message he received from any entity related to Peloton since placing his order. He tried calling the company’s customer service line for more info and got nothing.

“The whole season of having this thing through the winter is going to be gone by the time it gets here,” he says, adding that there’s a 50 / 50 chance he’ll end up keeping his order.

Another person The Verge messaged said they gave up on their Peloton order and instead bought SoulCycle’s similar connected bike. Peloton knows fulfillment is an issue, and it’s racing against the pandemic clock because once everyone’s vaccinated, people might end up wanting to leave their homes and get back to the gym.

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