Peloton’s move to sell its bikes and clothes on Amazon may help the battered home-child reinvent itself as it struggles with declining sales and demand, but it may not solve the problem. solve the fundamental problems that fitness equipment manufacturers are facing. Analysts said are now facing. The bicycle maker announced Wednesday that it will begin selling some of its products on Amazon after a long time focusing on its direct-to-consumer business. Investors initially welcomed the move, with the stock up 20%. Earnings results released Thursday showed sentiment weakening as shares fell more than 18 percent after Peloton reported a sixth straight quarter of losses. After skyrocketing in popularity during the pandemic as consumers exercised at home, Peloton has in recent months struggled with profitability issues and slowing demand as consumers Take back to the gym. CEO Barry McCarthy has been battling to turn the child of the pandemic poster around since taking the helm earlier this year, laying out a drastic $800 million annual cost-cutting plan that includes sabotage. waste, increase prices, close stores, and transfer delivery work to third parties. But even as McCarthy’s ambitious plans are in the works, investors are still losing faith in the stock, which closed Thursday down more than 90% from its all-time high. . Don Bilson of Gordon Haskett said in a note to clients after Peloton’s earnings. “AMZN’s flashy news in itself won’t turn this ship upside down. McCarthy knows it. He meant as much this morning.” Peloton did not immediately respond to CNBC’s request for comment. Problem needs or time to reinvent? Allen Adamson, co-founder of marketing and branding consulting firm Metaforce, said Peloton’s decision was a cost-effective way to slow the cash burn, move products and improve the balance sheet. . However, it won’t save the overall brand and business problems. Having saturated the market with buyers during the pandemic, Adamson said it’s time for the company to shift direction and focus on investing in new content, software and instructors to compete with the likes of fitness platforms like Apple and premium gyms like Equinox. Bernie McTernan, an analyst at Needham, said gathering new subscribers is another step on that agenda. Data from Peloton shows that demand for its bikes remains, the company told CNBC that Amazon receives about 500,000 searches for its products each month. However, some analysts still doubt that demand is as big as the company predicted – or as big as it once was. Sure, partnering with a logistics company as powerful as Amazon has its perks. Andrew Boone of JMP Securities said it could help Peloton ship products faster and cut costs. He noted that partnering with third-party delivery companies is nothing new for the bike maker, which has worked with XPO to ship products. MKM Partners’ Rohit Kulkarni also sees the deal as a way for Peloton to store growing inventory in Amazon warehouses, potentially limiting logistical issues. “Amazon’s Prime subscriber base is an extremely attractive potential customer base for Peloton,” Kulkarni said. “Additionally, Prime benefits such as fast and reliable shipping and subsidized promotional spending will help Peloton improve customer experience and unit economics.” A potential boost to brand recognition The economics behind the deal – including how much Amazon is making – is still unknown, but similar partnerships are not a new phenomenon. with the e-commerce giant. Not all initiatives are successful. In 2017, Nike launched an experiment to sell some products on Amazon after years of resistance. The program was shut down in 2019. Simeon Siegel of BMO Capital Markets said: “The question becomes leverage. “Like the big box, getting a brand registered with Amazon is a double-edged sword and the question becomes distribution versus brand control.” Dana Telsey of Telsey Advisory Group agrees that there can be some downsides to selling on Amazon. Giving up control over distribution can hurt brand identity, plus wholesale is often a lower-margin business than direct-to-consumer. That means the company may need to recoup capital with additional volume and accessory sales. Some analysts also argue that selling on Amazon could hurt the brand’s premium reputation. The company says its more expensive products, such as Bike+ and treadmills, will not be for sale on the site. That said, the e-commerce company’s ability to successfully and easily connect consumers with desired products could prove a strong advantage for Peloton going forward as it strives for strategies. new to improve its business, said Brian Nagel of Oppenheimer. “It’s not a silver bullet, it’s not an end-all, but it shows how the company is rethinking itself,” he said. Regardless of the success of this partnership, the future of the company depends on its shareholders. “Investors need to determine whether Peloton’s future success will be driven by cash breakeven or if success will be driven by growth,” said BMO’s Siegel. “It’s hard to justify the company seeing physical price increases with no growth, and the decision to move to Amazon has an impact on the brand.” – Lauren Thomas of CNBC contributed reporting