Lou Lentine, Echelon CEO, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss the controversy around its product on Amazon, its offerings and much more.
ALEXIS CHRISTOFOROUS: It's been a roller coaster of a week for exercise gear maker Echelon. After the company released a $500 bike on Amazon, branding it as the Prime Bike, Amazon said it has no formal connection to the product, telling Yahoo Finance, quote, "this bike is not an Amazon product or related to Amazon Prime. Echelon does not have a formal relationship with Amazon. We are working with Echelon to clarify this in its communication, stop the sale of the product, and change the product branding."
Here to discuss is the CEO of Echelon, Lou Lentine. Lou, good to have you here. Break this down for us. What happened exactly this week, and what is your relationship right now with Amazon?
LOU LENTINE: We have a great relationship with Amazon. So how this happened, in January, we met with Amazon at the Consumer Electronics Show. And Amazon was very excited to get our entire line of Echelon connected products up on Amazon. We actually created a great program where they were actually bringing it in on import.
I mean, it wasn't a seller central program, it was a merchant where we're selling to them. One of the things they asked for was a $500 price point bike as well. So we worked on a $500 bike, and we agreed on calling it Prime. The buying department agreed on calling it Prime. We have emails, we have correspondence, everybody was onboard in the buying department.
Well, even-- as I said, even the purchase orders came in that it was Amazon Prime packaging, everything said Prime on it. It was the Echelon Prime Bike. Well, the product launched. It's being sold on their website for almost a month. And press came out about it this week. And we got a call from the buying department, says, great news, we sold out of the bike within hours.
But however, the internal team within Amazon does not want us to use the Prime name on the bike, which was a complete shock to us. So we-- you know, so now the bike is sold out, and we're working on a new brand for the bike and moving forward on it. So it was a disappointment, miscommunication within Amazon.
I guess the whole Amazon did not align on their branding strategy on this bike.
ALEXIS CHRISTOFOROUS: Lou, I did a search for the bike on Amazon just before the show. I didn't find it. Is that $500 bike that you were branding as a Prime Bike on the Amazon platform right now?
LOU LENTINE: How Amazon works, when a product sells out, it's no longer on there. And so it's not available on there right now. It was actually part of a multi-product display, and it's been, you know, it's not on there because it's been-- it's sold out. So we hope to have it back on there. We are, you know, as I said, working on a repackaging and working on-- there is no inventory with Amazon right now.
We have-- because we sold it out. We have more goods coming in soon. And we'll be working on a new brand together with them to relaunch the bike.
BRIAN SOZZI: Lou, I was reading a recent interview with you, and you were noting that the likes of, I believe it was Peloton and maybe even Tonal, those brands are excluding. They're exclusionary-type brands. What did you mean by that, and what are you doing, I guess, to be more inclusionary with the instructors you bring on and the bikes you sell?
LOU LENTINE: Well, our price points start from anywhere from $500 all the way up to $2,000. And we're creating an environment for people to work out that is not based on the amount of money you have or what you can afford. We try to make a price point for everyone. You know, we have a very broad distribution strategy, unlike the Peloton or the Tonal, where you can find our products in Walmart.
I mean, we have a great bike called the Sport Bike in Walmart, $500. We have a great product in Costco, we have a product in Best Buy, we have, you know, most major retailers are carrying our products. So it's very easy for people to get it, to try it out. And we've created great distribution. So it's easy for everyone to have it.
Our instructors are real people. They're not all the six-pack ab instructors. These instructors are great, they relate to you, they get involved with you on social media. They almost become your friends. If you just follow us, you see the instructors are real, and people love them.
An example, we had an instruction-- instructor appreciation day that was put on recently for our instructors. We have over 30 instructors. Wasn't us who put it on, it was our members who put it on. And they created a big huge card, they all went on classes and just made notes within their leader board, how they love them and thank you so much for everything you do for us.
And then they created a 30-minute video that they put together with about 150 different of our members. So it's a really nice close-knit community. And we're very positive. We're all about being positive and all working together for better health.
BRIAN SOZZI: I just want to clarify, 30 seconds left, Lou, just want to clarify some things. The Amazon Bike, it didn't sell out. Amazon pulled it, right? And then we've also seen reports too that the Echelon bike at Walmart has not sold too well. Where do you stand on that?
LOU LENTINE: Oh, that's false. Number one, it did sell out. And then they did decide not to put it back on. But they can't put it back on, they don't have inventory. But we're not putting it back on till we have rebranded it. But it did sell out, that's false information. Walmart bike not selling out, my gosh, we've gotten multimillion dollars worth of orders from Walmart.
Walmart is doing tremendous. It's almost a 4.6 rated bike, it's crushing it. It's the number one fitness product in Walmart and online. I mean, it is doing tremendous. So much, I mean, we have meetings-- we had meetings with, not only we were in phone with Amazon yesterday, trying to get more purchase orders for them because they want to place more orders, and they said they want to get them.
But, you know, we're working through this name issue. But no, Walmart is destroying it. They're doing an amazing job. Everywhere-- I mean, our business is up 600%. Our business is booming. This was a little issue with Amazon. But, you know, really, it's not an issue because we're really close with them, and we are working through it with them.