Pricing an NFT is one of the trickiest parts of selling artwork or collectibles in the crypto space. Price yourself too low, and nobody will take your work seriously. Price yourself too high, and you’ll be overlooked by all but the wealthiest of buyers.
The last thing you want is to have created an exciting NFT project only to find your pricing turns away potential buyers. Setting a fair price is, therefore, essential to success.
There’s no right or wrong when it comes to pricing NFTs, with the space still very much in its infancy. However, below are a few tips and tricks to help you extract the most profit out of your work by deciding on a fair value.
As a general rule of thumb, the more copies of your work are minted, the less valuable each becomes.
If you’ve minted a one-off masterpiece, for example, this should be reflected in your price. By being the only one in existence, collectors will be happier to pay premium prices in order to own it.
Minting an edition with multiple copies, on the other hand, should be priced lower than a 1:1. In the case of unique artwork, this rule especially holds true. When minting a single, definitive version of an artwork, the buyer will be effectively buying the piece itself in digital form. If printing 20 editions of it, buyers will mentally feel more like they are buying a rare copy.
It is important, therefore, to do some back-of-the-napkin math and figure out what will make you more money: a single, high-value sale or multiple, smaller sales that accumulate in value.
There is no right or wrong, and over time as you establish yourself, you will find which method resonates best with your audience.
In a similar vein, the price of NFTs is largely decided by the type of person interested in your artwork or collectibles.
If your work is a collection of randomly generated characters, for example, and you have no prior notoriety within the scene, then your price should target those looking to spot the next CryptoPunks or Bored Apes. These people will be effectively looking for a bargain that will appreciate in value. Setting your price too high will result in little to no interest unless you are already established.
In the case of a single, all-or-nothing style piece of original artwork that’s been tokenized, then you’ll be mostly targeting true collectors. These types of buyers understand the difference between an algorithmic NFT that is effectively a store of value and a work of art.
The type of NFT, you have, then, will attract different types of customers, so be mindful of your pricing.
One of the most important things to bear in mind is that there are currently more sellers of NFTs than buyers. This means that the price of NFTs is determined largely by what these early adopters are willing to pay.
These buyers also prefer buying off sellers with a proven track record with NFTs that have sales under their belt. Obviously, we all have to start somewhere, so selling your first NFTs at a discount price may be worth the hit in order to get those initial sales done and dusted.
It’s also beneficial to keep engaged with the buying community through platforms such as Twitter. Through interaction with these collectors on a daily basis, you’ll establish yourself not just as a seller of NFTs but as a contributor to the space.
Building a reputation in this way can take time, but it will pay dividends in the long run, allowing you to raise your floor over time.
With marketplaces such as OpenSea, it pays to set your artwork’s price at the upper limit of what you’d be happy to accept.
The reason for this is because of gas fees. Should you change your mind about the price of your piece and need to alter its price upwards, then this would require interaction with the blockchain. With blockchains such as Ethereum, this can be relatively costly and should only be done when necessary to avoid gas fees eating into profits.
The best method, therefore, is to set the price of your item at the top end of what you’re expecting and be open to offers. This will mean you can still accept reasonable offers from buyers but should there be someone who wants to guarantee they get hold of your NFT, they can do so.
The utility of NFTs is something a lot of buyers now look for when weighing up a purchase.
While a nice NFT artwork is a good investment as the metaverse develops, right now, buyers often look for tokens that can bring in extra value.
This can be something as simple as sending a physical copy of the artwork or collectible to the initial buyer. This has proven successful for a lot of artists and is useful for tempting those new to the NFT scene to enter the space. It allows these buyers to get over the non-tangibility of NFTs by also acquiring a physical version of them.
You can also price your NFT higher if they provide future unlockables, unique access, and airdrops. Gary Vee is the master of this with his Vee Friends project unlocking a whole suite of one-off experiences and privileged access within the community.
Higher prices can also be set if you reward buyers with repeat-buy discounts. The future discounts can be offset with a higher than expected initial price.
Lastly, experiment with different marketplaces. While OpenSea is the go-to for selling NFTs, it has a reputation as the place to pick up some of the less valuable NFTs.
Different platforms have varying price floors. By researching your NFTs genre on different marketplaces, you can identify the one with the best chance of netting you the most money.
It’s also worth taking a look at any royalties structure. While you might not get the highest initial price on OpenSea, for example, but it allows you to set your own royalties percentage. Taking a modest drop in the sale price may be worth it if the piece changes hands several times on the busy marketplace and nets some continuous royalties.
If you have access, more exclusive platforms such as Nifty Gateway and Foundation are also much more suited to big-ticket original artworks. You’ll therefore want to keep multiple edition collectibles to the busier, cheaper platforms such as OpenSea.
Of course, pricing is less of a science but more of a skill. Developing this kind of knowledge requires time, therefore. Over time, you’ll get to know your audience better and intuitively grasp what a suitable and fair price is without doing yourself out of profits.