NFT Pricing Strategy Guide – How To Determine NFT Prices
The reputation of nonfungible tokens (NFTs) in the market began to fall in the start of year 2021. However, by the end of the March, the complete lifetime volume of these digital products traded came out to be 550 million dollars. The nonfungible tokens (NFTs) may include all kind of digital assets such as artwork, collectibles, digital sports, virtual world objects or video game characters.
On the Ethereum network, the place where the ownership of nonfungible tokens (NFTs) is recorded can be referred as blockchain. The ownership will be transferred and the recording of all the payments received via crypto trading will be done over the blockchain, in case the digital asset gets sold in the market.
The concept of nonfungible tokens (NFTs) is entirely different from the traditional cryptocurrencies. The main characteristic that makes the crypto assets distinct is their ability to be interchanged and being fungible. On the other, the nonfungibility is the important trait of these digital assets termed as nonfungible tokens (NFTs).
Here is a comprehensive article to help the readers to price their nonfungible tokens (NFTs) while gaining maximum profit through it and learn if the process is worth it or not.
How to Determine the Price of Nonfungible Tokens (NFTs)?
Finding out the best strategy to sell the nonfungible tokens in the market and taking correct decisions regarding the price of nonfungible tokens in the market, are the major concerns of the beginners in the crypto market. In any secondary marketplace, the sellers who want to sell their nonfungible tokens (NFTs) may choose a listing price. This is because there is no fixed policy or strategy to mark the price of the nonfungible tokens in the market.
One has the complete authority to choose the pricing strategy for his collection of nonfungible tokens being the creator of the digital assets. However, one should be careful in setting the price. In case the price is set too high, it may result in the risk that the NFTs would not be sold in the future. On the other hand, it may prove challenging in the future to raise the price of the NFTs if one sets the price too low.
Therefore, before setting the price of the digital assets it is important that one should consider certain factors that would help him in determining the correct price that should be set for the nonfungible tokens in the market.
Understanding Different Types of Costs Involved
When a trader decides to create and sell the nonfungible tokens (NFTs) in the market, he comes across a number of different types of costs in the market. These costs may include the cost required for the creation of the digital assets. In case one wants to learn the method of using the nonfungible tokens on his own, he can pay the price to any expert 3D artist who can teach him the skills.
Moreover, if one does not belong to any background related with software technology, he can use the option of using the platform with zero code tokenization such as TokenMint. In addition to that, there may be minting charges.
These charges keep on changing in the market with the variable gas fees, the fees charged by the marketplace to mint or list the nonfungible tokens, the fees that is charged by the NFT marketplaces for selling and most importantly the cost that is required for nonfungible tokens’ marketing.
Functionality and Rarity
The supply of an asset and the type it belongs to determines its demand in the market. A rare nonfungible token carries much more worth than the commonly existing one. Therefore, the price of a nonfungible token that exists in a limited number in the market may be much higher than the one that exist commonly in a large number.
In the same way, the worth of a painting existing physically will be much higher than the copies of that painting created digitally. In order to buy the good and services, the utility tokens are needed so they have more utility then other tokens in the market. Therefore, before determining the price of utility nonfungible tokens, it is important to look upon the needs of the client.
Improving Visibility and Building a Brand
There is a lot of room for growth available for the nonfungible tokens in the market in spite of still developing across the world. In order to be successful and accomplished in the market, one needs to be consistent in his goals. In the similar way, to be successful in the market, the traders dealing with nonfungible tokens have to be passionate and trust the trading process.
In order to create a reliable position in the market and successfully sell nonfungible tokens, the name of the artist has to be made popular among the masses. This can be done by using the social media platforms such as Telegram, Discord, Twitter etc. This also familiarizes the people with the journey of the artist in the background.
Moreover, a number of new opportunities may be unlocked in this way where the trader can sell the work at right prices while working in coordination with businesses, artists and other platforms in the space of nonfungible tokens.
Making Sales Proof of Concept for Increasing Floor Price
It is important that not to follow other artists in the market and be overconfident as one may not be able to earn the same amount of profit as the other trader has achieved in the past. It is important to establish the proof of concept in order to raise the floor price of any nonfungible token. This can be done by making consistent sales in the market.
The lowest price that can be given to the nonfungible token and keeps on updating with time is termed as the floor price. The founder or the creator of the project dealing with the nonfungible tokens determines the floor price during the process of minting. The floor price is set when the process of minting is completed, and the creators have listed their work in the secondary market.
As the nonfungible token gain popularity in the market, the floor price of the token then starts increasing gradually. The creditability of an idea can be assessed, or the real function of the system can be proved by using the proof-of-concept mechanism in the market.
Utilizing Different Platforms and Maintaining Consistency in the Prices
There are a number of marketplaces available where the artwork can be sold by the creators of the nonfungible tokens. These marketplaces may include Rarible and OpenSea. However, it is important to note that the work of the artists will not be valued much at the place where minting happened, but all the other places will understand the value of the artwork.
Therefore, to stay active in the market and to gain a considerable grip in the market, one should leverage a number of different platforms should be leveraged by the traders but at consistent prices. This is the most ideal situation to extract a good profit through NFTs.
Adding Value to the NFTs by Offering Unlockables
The hidden content that can be only viewed by the owner of the nonfungible tokens is referred to as unlockable content. The utility for the owners is created by the unlockable content while dealing with nonfungible tokens. By the creation of unlockable content outside the digital token, the worth of the nonfungible tokens can be increased by the artists in the real world. When one configures the nonfungible tokens, he might a setting related with the unlockables.
The example of the unlockable content on the nonfungible tokens may include the thankyou notes, the video clips with high resolution, a number of physical products such as signed objects and redeemable discounts. The work of the artists can be sold at competitive prices in the market and can help in building a better brand equity by the application of this strategy in the NFT space.
How to Become a Professional Seller of Nonfungible Tokens?
Understanding the industry of nonfungible tokens, the NFTs that are commonly sold by the artist, the blockchains that are required for the development of nonfungible tokens, the marketplaces where they are sold, and the price ranges of the tokens being sold in the market are the important parameters that should be looked for to carry out successful trade of nonfungible tokens in the market.
Then it is important for the trader to look for his goals in the trading procedure and select a suitable marketplace accordingly. Moreover, before selecting the unique value position of your token, it is also important to note the selling cost, service, minting and the ways of creation of the nonfungible tokens.
The nonfungible tokens can be priced at any price by the seller that suits him. But to charge a bit higher than the other tokens in the market and to determine the distinct qualities of your token that makes them different from the ones in competition in the market finally decides the final price and value of the token.
The next step is to carry out a detailed research about the ways the nonfungible tokens can be sold in the market. It is the preference of the seller that decides the techniques he has to choose in order to sell the nonfungible tokens in the market. There are two most common approaches that can be adopted by the trader to sell his nonfungible tokens in the market. The tokens may be sold at a fixed price by the seller, or he may sell it at auction.
Selling NFTs at a Fixed Price
During the process of minting of the nonfungible tokens, the seller can decide the fixed price of his digital tokens. This is the price at which he will be selling the nonfungible tokens in the future.
Selling NFTs at Auction
However, the trader can also choose the option of auction in case he wants to test the market conditions. The English auction is considered as a normal practice in this case. The seller has to choose the auction where his nonfungible token is paid the most by the bidder and it has won in that auction.
In addition to that, the option of timed auction can also be chosen by the seller. It is also a kind of English auction where the bidder paying highest amount for the nonfungible token wins in the end, however, the length of time given to the bid is determined beforehand. Another kind of auction is the Dutch auction. This is the type of auction where the seller keeps on decreasing the price of the nonfungible tokens gradually until one of the bidder buys it.
Moreover, the option of royalties can also be chosen by the seller of the digital tokens in case they want to earn money each and every time someone buys their work. This is how the seller can choose a fair and moderate price for his nonfungible tokens by adopting any of the method mentioned above.
How Can Nonfungible Tokens be Priced on OpenSea?
Using the platform of OpenSea, the sellers can sell their nonfungible tokens by following the simple steps that are mentioned below.
- First of all, the seller has to browse the OpenSea page. On that page, he will come across a button named as “Profile” present at the top right corner of the page.
- The seller has to then choose the nonfungible token that he aspires to sell from the wallet. In case he owns none, firstly he should learn about the creation of an NFT in order to initiate the procedure.
- Then there appears an option “Sell” at the top right corner of the item page.
- The next step is to decide the approach for pricing the token. The seller then chooses from fixed price or the auction method. Then he has to set a default period for sale or using the calendar decide the specific duration.
- Below the section of “More Options”, one can see the option of “Reserve for specific buyer” where he can type his wallet address and keep the item aside for any specific customer he wants to sell it to. The platform of OpenSea charges a fee of about 5.5% for this kind of sale. This includes the 3% share of the creator and remaining 2.5% for the services provided.
- The final step is to complete the listing process by signing a transaction. The confirmation message will pop up on the screen indicating the user that the item has been finally listed to be sold.
Is it Possible to Sell Nonfungible Tokens Without Marketing?
Similar to all the products in the market, marketing is considered as the heart of selling the nonfungible tokens too. Therefore, it may be the lack of awareness among the masses about the nonfungible tokens that could be reason that one is unable to sell his tokens in the market.
There are different preferences for every artist in the market. Some of the artists decide to stay anonymous while selling their work while some of them might want to be visible to the world. It is of prime importance for the seller to raise the profile of his tokens that he informs the buyer about the information regarding his professional background. This information may include the name of the seller, his experience with blockchain technology, nonfungible tokens and other crypto art in the market.
What Type of Nonfungible Tokens are Sold Best?
Those nonfungible tokens may be sold better in the market that have an authentic presence on different social media platforms and the ones who show the clear roadmaps for future to the clients. The artist can attract a number of customers and construct a brand on his own if he frequently promotes his work on social media platforms such as through multiple tweets or engage himself in the conversations regarding the nonfungible tokens on different platforms.
Moreover, one can also turn the visitors to a certain website into his actual buyers if he creates a creative website that displays the genuine information regarding all the nonfungible tokens created by the artist listing all his collection of digital tokens. However, it is important that the seller should not indulge himself in providing his customers too much to attract a greater number of people or not delivering at all. Both these conditions may lead him to loss in future.
Conclusion
Pricing the nonfungible tokens correctly is an important task that should be carefully handled by the sellers. A number of factors in the market decide the sales of the nonfungible tokens. Selling at lower prices would not provide conformity that all tokens will be sold. Similarly, selling at higher rates would make the work lose its value.
Thought there are no definite rules for pricing the NFTs, however, it is always advised to the artists that they should study the market conditions and fluctuations thoroughly before finalizing any decision regarding their work.
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