Grit Marketing is having a big year in 2023. This direct-to-door sales company made his $95 million, donated more than $900,000 to charity, and moved into a new office building in Lyndon with an indoor basketball court.
Current sales representatives say Grit Marketing has also stopped paying some of its sales representatives amid a series of lawsuits.
In mid-February, 18 nearly identical lawsuits were filed in Salt Lake's 3rd District Court, all by former sales representatives who allege that the company has not paid them outstanding fees. The 18 plaintiffs suing Grit allege that Grit owes them between $10,000 and $250,000 each, totaling $1.4 million.
According to the company's website, the company was founded in 2020 and contracts door-to-door salespeople with pest control companies across the country. His growth has been meteoric, generating tens of millions of dollars in revenue in his first year and teaming up with the Utah Jazz in 2022.
Grit promises “significant revenue increases” to pest control companies, according to its website. Co-founder John Taylor offers his company's salespeople a “platform to increase financial literacy,” as well as the ability to earn “hundreds of thousands of dollars” and turn their lives around with enough grit and hard work. He told podcast host Jimmy Rex. In the early days of the company.
Attorney Justin James, who represents all 18 plaintiffs, said the unpaid fees represent a lot of money for the salespeople suing Grit, most of them young college students.
“I'm just trying to help these young guys,” James said.
Grit executives and the company's attorney did not respond to requests for comment from The Salt Lake Tribune.
Sales and recruitment
Grit Marketing is what James and the direct sales experts call a “mercenary” sales force, and the company isn't selling its own products. Instead, they hire and train independent salespeople who sell on behalf of other companies, especially pest control companies. Researchers say this model can save companies money because salespeople are paid on commission rather than a salary.
Grit Marketing was not included in the Kem G. Gardner Institute's analysis of Utah's direct selling industry. The study, published in 2022, used data from 2020, the same year Grit was founded. However, this study and the Federal Trade Commission define direct selling as a sales strategy that relies on the success of independent salespeople. MLM companies also encourage their salespeople to hire new salespeople and give incentives to each new hire, according to the FTC.
Grit Marketing's sales representatives receive a commission from sales. They also have an “override,” or a percentage of sales for each new salesperson they hire, according to court documents.
All 18 plaintiffs claim that Grit is obligated to pay the fees. Ten of them claim they should also have been paid a portion of the new employees' sales.
Experts say multi-level marketing is popular among women, especially those in Utah. A study by the Gardner Institute found that as of 2020, most salespeople at large direct selling companies are women, who are attracted to the flexibility and financial freedom that MLMs offer. More critical scholars have called this business model “predatory.” Representatives of brands like doTERRA not only sell products, but also lifestyles such as health, beauty, and luxury.
Grit is the hyper-masculine counterpart of MLM. Social media posts celebrate top sellers with dark, stylized graphics that harken back to the early days of the internet. Some posts borrow militaristic language and iconography to describe Grit employees. One post reads, “Deployment will be here before you know it,” in the caption of a flyer about “Grit His Trench Education Camp.”
The company's website includes an online store filled with branded apparel. All items are marked as SOLD OUT.
An Instagram follower and Google reviewer commented: “We are proud to work with an organization that is always striving for greatness,” adding that they will be “forever changed” by the company's “gratitude.”
One sales representative commented, “Being here is one of the top five lucky things in my life.'' “I have never been surrounded by a better group.”
“I'm lucky to be part of something bigger than myself,” another commented.
A smaller faction on the internet is more skeptical. On Reddit, users who claimed to be former salespeople or knew salespeople (Reddit anonymous) said they felt like the company was a “pyramid scheme” or a “scam.”
“This is a terrible low in my opinion,” said one Reddit user who said he sold on Grit for a week before quitting. “I had the impression that sales was just about talking about a product and putting in a lot of effort to occasionally try to find people who might be interested in it, but I was wrong. Instead, I discovered a culture that is a way of exploiting the emotions of vulnerable people in order to get what they want.”
Grit's top sellers sell more than $1 million a year in pest control services, according to the company's Instagram posts. The commission structure is based on “veteran” status, the longer you stay and the more products you sell, the more you earn. Some plaintiffs claim they are entitled to 13% of sales. Some claim they were eligible for up to 63%.
According to each lawsuit, Grit told all 18 sales representatives that they would pay their outstanding balances “by January 26.” Plaintiffs argue that this has not yet happened.
According to court records, Gritt has been served on both cases but has not responded.
Shannon Sollitto is Report for America Business Accountability and Sustainability Officer of the Salt Lake Tribune. Your gift, matched by an RFA grant, will help her keep writing stories like this one. Click to consider making a tax-deductible gift of any amount today. here.
