Since their fairly unassuming start in the mid 2010s, and in contrast to the relatively slower burn of blockchain applications more generally, NFTs have exploded in popularity in the last year. Indeed, it’s reached the point at which they’re even discussed on late-night talk shows! Rather than wallow in FOMO, many of us are instead looking to take the opportunity to make and sell our own NFTs, and cash in on the trend. Before embarking on an OpenSea voyage though, there are some things you should know.
1. Fees Can Add Up
Part of the beauty of blockchain-backed tech is that it can be quite straightforward to trade without necessarily jumping through all the hoops of older forms of trading. But in the world of NFTs, you’re going to be dealing with fees. You’ll need some cryptocurrency to actually pay the fees, with the crypto itself of course usually coming with its own costs (either from mining or purchase). On the Ethereum-based marketplaces there are also “gas” fees to consider for using the mainnet, and due to the network traffic these days, these fees can be considerable.
Bottom line: Expect to pay substantial fees to mint, list, auction or destroy an NFT, to the tune of hundreds of dollars. Platforms like Rarible give you the option of passing on the minting costs to the buyer using lazy minting. You might also avoid some of all this by using the Polygon network. In addition, however, there are marketplace transaction fees that vary between platforms — 2.5% on OpenSea, 3% on Solanart and Super Rare (although the latter has an additional 15% fee on the final sale). And these differences bring us neatly on to the next section….
2. Picking the right Marketplace
You’ll want to do some careful research here. Although OpenSea is usually the first choice recommended, there are a number of factors — including but not limited to fees — that might draw you elsewhere.
Rarible links to OpenSea in order to benefit from the same search results and is not only a little cheaper but also easier to use. Or take Theta Drop, the tokens for which launched recently, causing the Theta Network to rally. Unlike most NFTs that still run on Ethereum, Theta is taking advantage of a newer generation of PoS consensus to build on a greener layer. And then there’s Mintable as well, which has a “Pro Plan” for sellers with Shopify-like benefits in terms of advertising, custom stores, and ’round-the-clock customer service.
3. Setting a Fixed Price Versus Auctioning
Financial guidance platform AskMoney explored NFT business opportunities in a recent article, and pointed out that, as with eBay, you’ve got the option of either selling at a fixed price — generally denominated in USD — or selling to the highest bidder in an auction. This is something a lot of newcomers to NFT marketplaces are unaware of, and as you might expect there are advantages and disadvantages to both.
Setting a price means choosing the right price, which is a challenge. Standard auctions where you set a minimum are the most popular, but in some cases there are also decreasing price auction options where you set a high starting offer; popular artists may even opt for an otherwise-risky no-reserve auction. And within some of these structures, you can also impose time limits on bids.
4. Marketing Strategies
Beyond the content of the asset, there are a number of marketing techniques that will help drive sales –– a number of which have been discussed in a column at Medium. People who want to generate sales will typically try anything from SEO-optimized websites (with clear descriptions of products), to social media and content marketing, to email marketing (once something of an audience has been built up.
Selling NFTs isn’t for the faint of heart, and it certainly isn’t free money. But for people who want to put the work in, and have creative concepts to sell, it can be worth it.