Pricing Strategy for first time NFT Artists
So NFT has been the hype of the year. We’ve seen Beeple’s NFT artwork sell for over $69 Million dollars. We’ve also seen the Smoking Pipe Cryptopunk fetch for $7.5 million dollars. And now everyone wants to be selling NFT’s.
The sad reality is not everyone going to be filthy rich. But I believe everyone can cash in on this of NFT hype. I believe we are just seeing the hype get started with OpenSea raising a fresh new round of funding as well.
So lets talk about pricing:
1. Secondary Sales / Royalty - This is probably the bread and butter for many NFT artists. Set a reasonable amount. You’ll be cashing in on every resale of your project. Which means you could be cashing in for life time. The ideal number I believe would be 10% in my opinion. But again it depends on how often do you think this will resell. If you think the resell # would be low I believe the percentage should be around 10% if you think it will be resold often like trading card then the % should be lower.
Do you have a huge fanbase / following? if not skip to #3.
2. Auctions - I think auctions are great if you have demand already which means you let the market dictate the price of your NFT. Of course this does not work for new NFT artists. They could give it a try but if it does not sell I think it will just be an eyesore when people see the auction had no interaction.
3. Hidden Fees - This is something that we really need to take in consideration. We can keep the price of an NFT $10 on a Marketplace like OpenSea but the minting cost and fees the buyer has to pay will be astronomical which could be 5 to 10x the NFT price at times depending on the Ethereum Gas price. So this is something you need to keep in mind that can deter a buyer to purchase an NFT due to the high fees.
4. Fair Pricing - The real question is how much are you willing to pay for your own NFT? Be honest with yourself. Don’t compare your NFT to hyped out NFT projects. As you got no hype. So how much are you willing to pay? taking in consideration of the hidden fees and the secondary fees?
5. Scarcity - Artist sometimes think it’s easy to just duplicate the same NFT many times. It’s not an ideal situation. You should keep the NFT scarce as possible making others want the NFT driving the price up. It’s simple supply / demand. Just remember if price is going up you’ll still be making money on the secondary sales. Quality is better than quantity here.
6. Bonding Curve - If you’re making a collectible collection (example: cryptopunks) of NFT’s, the best ideal idea would be to increase the price of the NFT’s with a bonding curve. This creates fear of missing out and is more incentivizing for the early adopter of the project as they get a discounted price for being an early adopter.
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