NFT Pricing: How to Price Your NFT Correctly?
Your NFT pricing model can make or break your NFT collection. If you price your crypto assets too low, you stand to lose out on a fortune. On the other hand, pricing them too high, and your project may not get off the ground. Setting a price for your NFT is a subtle art of balance. You have to keep your goals, target audience, and audience expectations in mind when creating and pricing your NFTs.
There are no set rules for NFT pricing because it’s truly an individual choice. However, considering market conditions, comparative examples, and personal objectives can help find an optimal pricing strategy for your NFT collection.
Things to consider while pricing the NFT
Before making any final decisions about your NFT pricing approach, make sure you’ve done your homework on what your direct competitors did and how they performed in different market environments. Below are the factors that would ultimately determine the price of your NFT project:
The first factor to consider when determining a price for your NFT is its scarcity. Rare NFT artworks typically sell quickly and are comprehensively more expensive. No matter which marketplace you check, you will find all types and forms of NFTs. Most NFT makers simply follow trends, while others create original works of art.
The thumb rule is that the more distinctive the artwork, the higher the price tag. Some questions to ask yourself when pricing your NFT are-
- How many editions do you have in your collection?
- Is your NFT a stand-out from the rest of the crowd?
- Do your artworks have tens or hundreds of editions?
NFT marketplaces have two categories of sellers- fresh artists and established artists. Fresh artists are those who are looking to make a profit from selling NFTs; meanwhile, established artists are looking to sell their artworks or physical assets as NFTs. Established artists are already doing well and use NFT as another platform to promote their work.
Take the example of Beeple- he has become such a big name in the NFT space that every time he announces an NFT drop, it creates ripples in the industry. You can automatically assume that his NFT project will be worth at least tens of millions.
For new artists, the scenario is quite different. Most investors will be apprehensive about paying a massive sum of money on NFT from an unknown creator. Therefore, you must consider pricing your NFT on the lower end such that the floor price doesn’t deter buyers but also allows you to earn a profit.
Fluctuation in ETH and crypto market
NFTs are purchased and sold using cryptocurrencies such as Ethereum (ETH). Since cryptocurrencies are notoriously volatile, always keep the current NFT market fluctuations in mind when setting the price of NFTs. 1 ETH might be worth $2000 today and $3500 next week. Once you have decided on a price for your NFT, adhere to it. Don’t let the market price compel you into lowering your rates. The crypto community often purchases NFTs based on their ETH worth rather than their fiat value.
Your choice of NFT marketplace plays a vital role in the pricing because different marketplaces cater to different customer bases. To target different types of buyers, divide your art into two or three categories. Some marketplaces are open to the public, while others are exclusive.
Most artists start their careers on open marketplaces while they wait to be accepted on more exclusive marketplaces, which might take many months due to the enormous volume of applications. For lower-priced collectibles, you can do it on platforms that aren’t Ethereum-based. Alternatively, you can sell your rarer NFTs on more exclusive platforms. Sell your NFTs on the biggest Arabic platform in the Middle East for trading NFTs UPYO.
Utility features are becoming more crucial in establishing long-term values for NFTs. Many collectors are looking for more than just an art piece to appreciate solely for its visual aesthetics. They want to be able to use the NFT for perks and exclusivity. Therefore, you may consider incorporating unlockable content, incentives, and other exciting perks. This can include a physical print, a discount on your next collection, or even early access to your future drop. NFTs with better additional features can be priced higher.
NFT Pricing Strategy
Price as a marketing strategy
Your NFT collection’s price represents the market value of your work. A common marketing strategy used by many new artists is to price their NFTs lower than the actual value. This is done to improve sales volume and build a loyal following. Some artists do this by selecting a reduced price for their initial collection so that early consumers feel rewarded for their early support.
Increase the price linearly
While it’s impractical to expect huge earnings right away, don’t underestimate the value of your work. The first sale is often the most difficult, but once that’s done and you’ve gained a significant number of collectors interested in your work, use a linear model and gradually raise the floor price of your NFT.
Royalties vs. selling price
There are two methods to profit from your NFT project- sale price and royalties. Depending on your NFT type, your ratio of royalties to the selling price will vary. Regardless of the initial selling price, you will always earn royalties from secondary marketplaces.
The more tokens you produce and the faster you sell them, the higher the floor price in secondary sales will be. Hence, finding an accessible price point is crucial to attracting more buyers. Many new creators giveaway their NFTs for free because they know that they will earn profits through royalties in the future.
You should objectively view your work and set the price as a seller. The final NFT price should always be profitable for you in the long run. Invest your time in the NFT community and do comparative research to know the exact worth of your NFT project. Given the risky nature of non-fungible tokens and cryptocurrencies, you should keep track of trends and news to make well-informed decisions.
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