How to price your NFTs?
In early 2021, markets for non-fungible tokens (NFTs) began to gain some notoriety, and by the end of March 2021, this emerging digital asset market had a total traded volume of around $550 million. Any digital asset can be an NFT, including collectibles, artwork, video game characters, virtual world objects, and digitized sports.
A blockchain, often one on the Ethereum network, is where an NFT’s ownership is recorded. However, the sale of this digital asset will result in ownership transfers and blockchain recording of the crypto payment received. This is not to say that NFTs and cryptocurrencies are the same. In general, one of the fundamental characteristics of cryptocurrencies and fiat money is fungibility or exchangeability, while the non-fungibility of NFTs makes them valuable.
This article will discuss how to price NFTs profitably, what makes NFT floor prices go up, how to know if your NFT is valuable or not and how much you should charge for an NFT.
How are NFT prices determined?
As artists in the Web3 space begin their NFT journey, they can often find themselves considering the important question: “How do you price your art?” or “what is the best strategy for selling NFTs?” Although there are no fixed strategies for pricing non-fungible tokens, NFT sellers may choose to sell them at the listing price on a secondary marketplace. Alternatively, they can close the sale at a price that a buyer is willing to pay, called the buyer’s price.
Either way, as the creator, you have full authority to choose the best NFT price strategy. But if you set the price too high, you risk never being able to sell that item, and if you choose the price too low, it will be more challenging to increase it gradually. So here are some things to consider to determine how much you should pay for an NFT or how to price your NFT artwork.
Understand the different types of costs involved
Various types of costs are implicit in the production and sale of NFTs, including creation costs such as the salary of a professional 3D artist if one needs to learn how to create non-fungible tokens themselves. Using a zero-code tokenization platform like TokenMint can be an alternative option for those with a non-software development background.
Other costs involve minting costs which may vary with fluctuating gas fees, marketplace fees for minting or listing non-fungible tokens, selling fees charged by NFT marketplaces and the cost of marketing non-fungible tokens.
Rarity and functionality
A rare NFT is worth more than a common one because an asset’s supply and type determine whether it is rare or not. For example, a limited edition NFT may be priced higher than one with multiple copies. Likewise, a physical painting may be worth more than its digital image(s) available. In terms of functionality, utility tokens are more valuable because owners can use them to purchase goods and services. Therefore, you need to consider your customers’ needs when deciding the price for these NFTs.
Build your brand and improve visibility
The NFT ecosystem is still evolving and has plenty of room to grow. Since consistency is one of the most crucial factors for achievement and success, the same applies to non-fungible token artists, i.e. they need to show passion and confidence in the process.
To gain a reputation in the NFT industry, one needs to market their artist name to the masses via various mediums like Twitter, Discord and Telegram to make people aware of the artistic journey. Additionally, working with other platforms, artists, and businesses in the non-functional token space can open up additional opportunities to sell your work at the right price.
Make sales your proof-of-concept to increase the floor price
Having an idea that “if Beeple can sell their Everydays artwork for an astounding $69 million, why can’t I?” is good for motivation. However, overconfidence can be misleading, as you may not achieve the same sales that another artist in the room achieved. So, what makes the NFT floor price go up? To increase the floor price of an NFT, make some consistent sales to establish a proof-of-concept.
The floor price is the lowest price for NFT collections and is continuously updated. The floor price for a non-viable token is first determined during the minting process by the NFT project’s founder or creator. Then, once the embossing procedure is complete, holders who display their work on a secondary market set the floor price. That said, the floor price of an NFT project rises as it becomes popular. And proof-of-concept is evidence intended to assess the viability of an idea or confirm that it will work as intended.
Use multiple platforms and maintain some consistency in your pricing
NFT artists can sell their artwork on marketplaces like OpenSea and Rarible, but their work is considered valuable everywhere, regardless of where it was minted. Therefore, leveraging multiple platforms with consistent pricing for your work can be an ideal option to stay active and gain maximum traction.
Add value to your NFTs by offering unlockables
For NFTs, unlockable content creates benefits for owners. The artist can enhance the NFT’s real value by creating unlockable content outside of the digital token. There is a setting to unlock when configuring non-functional tokens. Unlockable content is the hidden content that should only be viewed by NFT owners.
Redeemable discounts, thank you notes, physical objects such as signed products, and high definition video clips are all examples of unlockable content on non-functional tokens. This strategy helps NFT sellers build brand equity and sell their work at competitive prices.
How to start trading NFTs like a pro?
The first step to successfully selling and pricing your NFTs is understanding the industry, blockchains used in NFT development, marketplaces for non-fungible tokens, common types of NFTs already being sold by artists in the space and their typical price range. The next step is to choose an NFT marketplace that fits your goals and determine the creation, minting, service and sales costs before defining the token’s unique value proposition. So, can you price an NFT at any price?
As a creator, you can price an NFT at any price you see fit. However, it is crucial to understand what makes your non-fungible tokens unique from the competition in order to command a higher price for your NFTs and attract more buyers if you have a distinct and appealing value proposition. Then research the ways to sell NFTs. The techniques you can use to sell your non-fungible tokens depend on your preferences.
NFTs can be sold using two common methods: at a fixed price or an auction, where non-fungible tokens are offered for sale on the open market. Fixed price can be set for NFTs during the minting process or if you want to test the market, choose an auction where your NFT is won by the highest paying bidder at the end, often called an English auction.
However, one can opt for a timed auction, a special type of English auction where an NFT is up for bids for a predetermined time period, with the highest bidder winning at the end. Additionally, a Dutch auction is another option available; it is a descending price auction where the price continues to decrease until your NFT is purchased. If NFT sellers want to make money every time their work is sold, they can choose the royalty option. Finally, set a fair price for your NFT after considering the above replacements.
How to price your NFTs on OpenSea?
Non-functional token sellers can sell cryptocurrencies or NFTs on OpenSea by following the steps below:
- Click the “Profile” button at the top right of the OpenSea page, as shown in the image below.
- Choose the non-functional token from your wallet that you want to sell or learn how to create an NFT to get started.
- Click “Sell” at the top right of the product page, as shown in the image below.
- Choose the price as a fixed price or timed auction, choose a standard sale period or set a specific duration using the calendar.
- The item can also be set aside for a specific customer by entering the wallet address in the “Reserve for specific buyer” field under the “More options” section, as shown in the image below. For these sales, OpenSea charged a 5.5% fee, including a 3% creator fee and a 2.5% service fee.
- Sign a transaction to complete the listing. A pop-up confirmation will indicate that your item is listed for sale.
Can you sell NFTs without marketing?
Marketing is at the heart of selling non-fungible tokens like any other product. So if you’re wondering why your NFT isn’t selling, it could be because of a lack of awareness among the community for non-fungible tokens. But how difficult is it to sell an NFT?
Each artist has their own personal preferences: some choose to be publicly visible, while others like to remain anonymous. However, in order to raise the profile of an NFT project, it is of utmost importance to inform buyers about your professional background, including your name, experience with blockchain technology and crypto art or other non-fungible tokens.
So, what kind of NFTs sell best? Although there is no sure answer, non-fungible tokens with a solid presence on various social media channels and showing clear roadmaps may sell better than others. For example, if an artist frequently tweets about their digital artwork and joins conversations about NFTs, it will help them build a brand and attract people to buy their work.
Alternatively, an attractive website that displays your NFT collection with an accurate description will indicate authenticity to the community and help convert website visitors to actual buyers. However, avoid under-promising or over-delivering to build customer confidence in your work.
