Peloton And Qualcomm Both Added A Tier This Week. Here Is Why.

Two very different companies made the same move on September 22.

Peloton, the exercise company, launched three treadmills. The newest one, the Tread Flex, costs $2,195 and folds up to take about half the floor space. It replaces a $3,295 model at the bottom of the lineup, so the cheapest Peloton treadmill just got $1,100 cheaper. Above it sit the Tread Vision at $3,495 and the Tread+ Vision at $6,695.

The same day, in Hawaii, Qualcomm announced its newest phone chips. For years it made one top chip each year. This time it made two: the Snapdragon 8 Elite Gen 6, and a more powerful Snapdragon 8 Elite Extreme Gen 6 that sits above it.

A treadmill company and a computer chip company. Both decided that one product was not enough. That is not a coincidence. It is one of the oldest ideas in business, and a kid can use it at a lemonade stand this weekend.

Good, better, best is when a business sells the same kind of thing at two or three levels.

The good version does the main job at a lower price. The better version adds features most people want. The best version has everything and costs the most.

You already see this everywhere. Small, medium and large drinks. Basic and premium video game editions. Phone storage sizes. Movie tickets with and without the big recliner seats.

The trick is that each level is aimed at a different kind of customer. Some people care most about price. Some want the most features. A business with only one product has to pick one of those groups. A business with tiers can serve all of them.

Because its old cheapest option still cost more than a lot of people wanted to spend, and it took up more room than a lot of homes have.

Look at what the Tread Flex leaves out. According to reports on the launch, it has a smaller screen, no fan and no camera, so it cannot do some of the running analysis features on the more expensive models. Those missing pieces are not an accident. They are how Peloton brought the price down while keeping the main job: a treadmill that works with Peloton's classes.

And look at what it adds. It folds. People in apartments or small homes may not have had space for a treadmill before. Now they might.

So the cheaper version does two things at once. It reaches people who were priced out, and it reaches people who were squeezed out by space. Both groups were customers Peloton could not sell to last week.

Qualcomm's story runs the other way. Instead of adding a cheaper option below, it added a fancier one above.

A Qualcomm product manager, Lekha Motiwala, explained it to TechRadar in simple terms. Some phone makers want the most advanced technology possible. Others want to reach a broader audience. So Qualcomm gave them a choice.

The Extreme chip includes everything in the regular one, plus extra features like special graphics cores for games and support for recording 8K video at 60 frames a second. The regular chip does 8K at 30.

Here is the smart part. Xiaomi, a big phone maker, is putting the regular chip in its 18 Pro and the Extreme chip in its more expensive 18 Pro Max. So now the phone company can do good, better, best too, and Qualcomm sells chips for both.

Here is something businesses know that most customers never notice.

When people see three choices, lots of them pick the middle one. The cheapest can feel like it might be missing something. The most expensive can feel like too much. The middle feels safe.

That means the top option is not only for people who buy it. It also makes the middle option look like a good deal by comparison.

Look at Peloton's lineup again: $2,195, $3,495 and $6,695. Next to $6,695, the $3,495 treadmill looks almost reasonable. You do not have to agree with the prices to see how the ladder works.

This is not a trick to fool people. It is a way to help different customers find the version that fits them. But it helps to know it is happening, whether you are the seller or the buyer.

Say you sell cookies. Right now you sell one cookie for $1.

Try three options instead.

Good: one plain cookie for $1. Better: two cookies in a small bag with a ribbon for $2.50. Best: a box of four cookies, one of them a special flavor, with a handwritten thank-you card, for $5.

Now write down what each one costs you to make. Ingredients, bags, ribbon, card. The difference between the price and your cost is your profit on each one.

At the end of the day, count how many of each you sold. You may be surprised. Lots of people who would have bought one $1 cookie might pick the $2.50 bag instead.

Keep your notes. A simple table with price, cost and number sold is the start of a real business plan. Some young founders write it in a notebook, some in a spreadsheet, and some use a planning tool like Foundra that walks through pricing and costs step by step.

Too many choices. Three is usually enough. Ten options can make people give up and buy nothing.

A best option that costs you more than it earns. Always check your costs before you pick a price.

Making the good version so bad that nobody wants it. Peloton's cheaper treadmill still does the main job well. Yours should too.

Forgetting to watch what people buy. The numbers tell you which tier to keep, which to change and which to drop.

Peloton has had a hard few years. Sales rose fast during the pandemic, then fell when people went back to gyms. A company in that spot has two choices: sell more to the customers it already has, or find new ones.

The Tread Flex is a bet on new ones. By lowering the starting price and making the machine fold, Peloton is trying to reach people who looked at a treadmill before and said no, either because of the price or because of where it would go.

There is a second part to the bet. Peloton makes money from subscriptions to its classes, not only from selling machines. Every new treadmill in a home is a chance at a monthly payment for years. So a cheaper machine can still be a smart move, even if Peloton earns less on each one, as long as more people sign up for classes.

That idea, selling the machine for less so you can earn more over time, shows up in lots of businesses. Game consoles and printers are famous examples.

Grab a piece of paper and answer these five questions about any business idea you have, even an imaginary one.

1. What is the main job my product does for a customer?
2. What could I remove to make a cheaper version that still does that job?
3. What could I add to make a special version that some people would pay more for?
4. Who is each version for? Write one sentence about the kind of person who would pick it.
5. How much does each version cost me to make, and how much would I charge?

If you can answer all five, you have designed your first tiered product. Peloton and Qualcomm answered the same questions, just with bigger numbers.

What is tiered pricing? Selling the same kind of product at different levels, usually two or three, with different features and prices.

Why do companies make a cheaper version of a product? To reach customers who could not afford or fit the original. Peloton's folding treadmill is aimed at people with less money to spend and less space at home.

Why do people often pick the middle option? It feels like a safe choice between too little and too much. Businesses know this and set up their options with that in mind.

Is good, better, best only for big companies? No. It works for bake sales, car washes, tutoring and almost any small business a kid might start.

How many options should a kid's business offer? Start with two or three. Track what sells, then adjust.

1. Peloton Debuts Three Treadmills, Including the Foldable, Quiet $2,195 Tread Flex, Bloomberg, September 22, 2026
2. Peloton announces new Tread, Peloton IQ features, CNBC, September 22, 2026
3. Peloton Launches $2,195 Folding Tread Flex, Plus Tread Vision and Tread+ Vision, Peloton Buddy
4. Qualcomm unveils the Snapdragon 8 Elite Gen 6 and 8 Elite Extreme Gen 6, TechRadar
5. Qualcomm announces the Snapdragon 8 Elite Gen 6 and 8 Elite Extreme Gen 6, 9to5Google