If you’re an artist, graphic designer, musician, filmmaker, or other creative professional, you may have read about a new opportunity for you to profit from your medium: NFTs.
That stands for Non-Fungible Tokens, a digital asset that is linked to blockchain technology and cryptocurrencies and can be bought and sold like physical artwork and recordings. Recent history is filled with true stories of artists making millions by “minting” NFTs.
Get grounded in the facts and then you can decide if creating a unique NFT is a smart investment for you.
It Takes Money to Make Money
You’ve heard that phrase many times, no doubt.
And it certainly applies to creating NFTs. The costs associated with minting NFTs are considerable. The average cost of an NFT launch is over $13,000.
There are ongoing costs associated with each token you sell, too. Energy costs—colloquially known as “gas fees”—are the greatest overhead expense artists encounter when they enter the NFT business. Every NFT transaction uses about as much energy as it takes to run a refrigerator for a month. The cost of that energy is paid by the minter, but it’s passed down to NFT creators and buyers.
However multi-talented an artist may be, he or she may not be an experienced marketer. That’s why many NFT creators outsource their marketing to specialized agencies to help them with branding, advertising, social media management, and other tactics that can help their tokens break through in an increasingly competitive marketplace.
How Much Can You Earn?
The highest price ever paid for a single NFT was about $69 million. It was sold through the renowned auction house Christie’s. You never know when that record will be broken.
But for those of us who don’t have a reputation in the fine arts—and aren’t selling through Christie’s—profits will be considerably lower. Truly, profits are all over the map. Sales of NFTs are largely emotionally-driven.
In that respect, they’re much like traditional collectibles, from baseball cards to bobbleheads. Some NFT concepts catch on, others don’t. A token’s value is also influenced by its scarcity. Some artists create scarcity by making limited-edition tokens.
NFT creators can also build tokens that include royalty clauses—they earn a commission each time one of their tokens is resold. On average, they earn between 5% and 10% of the token’s resale price, for as many times as it is sold. That’s a terrific way to generate a long-term passive income stream for yourself.
The History of NFTs
It’s only through the analysis of the history of NFTs and current economic and social factors that digital asset experts can predict where NFT assets and markets are headed. These experts differ, as experts will, with some predicting an NFT explosion and others an implosion.
The same is true of cryptocurrency markets, of course. And the truth may lie somewhere in between these extreme positions. Here’s what we do know, though. Between 2012 and 2016, some predecessors of the NFTs we see now began to emerge. The next few years ushered in a period of growth and NFTs became more mainstream. Some NFT market analysts have dubbed 2021 “The Year of the NFT.”
NFT trading reached a genuine crescendo last year, increasing by 21,000%. Trading in NFTs reached some $17 billion in 2021 according to CNBC, but other higher estimates are reported by other news sources. In 2023, NFT trading continued to increase, however at a much more modest rate.
The Future of NFTS
Where are NFTS going? And what is the future of NFTS?
Blockchain technology and the trading of digital assets are more familiar to the general public now, even while they may not be thoroughly understood.
Cryptocurrencies and NFTs have their own mystique: they’re The Big Thing right now and have a mysterious allure. They’re rare. They’re unique. Just like physical paintings and sculptures, they’re coveted, often for purely emotional reasons. Some are celebrity-branded and capture people’s fascination with fame.
Then, too, NFTs attract investors with the promise of easy money. Those factors support the conclusion that NFTs will continue to draw interest—and expenditures.
In addition, there are currently over 200 NFT marketplaces and their number is growing. Increasing accessibility of NFTs also portends well for NFT trading.
How Can You Launch a Successful NFT?
You can’t just design a visually attractive token and expect it to take off—although, strong visual appeal is certainly one component of most rock star NFTs.
In reality, it takes a lot of pre-launch planning to ensure your NFT will succeed. A successful launch plan includes developing your NFT’s brand story. A great brand story has both rational and emotional components, though in the NFT marketplace, emotional appeal probably trumps rational appeal.
You can define your brand so that it has wide appeal or you can choose to focus on attracting a niche audience. Both methods have proven successful.
The next step is to spread the word by communicating your brand message through a wide range of social media. NFTs live or die by the communities that embrace them. Find out where NFT investors are hanging out and show up there in full force.
Building excitement and anticipation and gaining brand recognition pre-launch is a proven NFT strategy. Brand marketing will blow substantial wind into your NFT’s sails and keep it cruising along. Associating your NFT with a gaming app may broaden its brand recognition and appeal. Engagement is the name of the game. If you can attract the attention of a powerful social media influencer, all the better.
When you get ready to sell, it’s important to choose the best NFT marketplace for your purposes. NFT marketplaces are similar to crypto exchanges but they’re specifically designed for trading NFTs. Some NFT marketplaces have been launched by well-known crypto exchanges like Coinbase.
You’ll also need to choose a crypto wallet before you can transact business. Nowadays, there are several crypto wallets designed with special features for NFT transactions. In addition, just like any other new product, you need to price your product competitively. Do your research and find out how much similar products are fetching. As a newcomer selling an unproven product, be sure you don’t price yourself out of the market. You can always raise your prices once your NFT is better known and has a strong foothold in the marketplace.
Finally, take steps to maintain your NFT’s relevance. As an NFT creator, think of brand marketing as a lifelong job: the oxygen that keeps your NFT alive. Drawing a well-conceived NFT roadmap and sticking to it will help ensure a lively future for your product.
What are your revenue goals and how will you meet or, with any luck, exceed them? How will you use segmentation to attract new investors? Where will you open new markets? Will you create product extensions? These are standard questions marketers ask themselves, whether they’re selling paint or pots and pans.
If you’re not familiar with how to build a product roadmap, research roadmap templates online to learn how. Once you’ve mapped out a course, share it with potential investors to build confidence in your vision.
Can Anyone Create an NFT?
With financial means and commitment, yes. Anyone can.
But what if can’t draw a straight line or sing on key? What if you have zero experience in brand marketing? What if digital currency is still a mystery to you? Think of it this way. Not every entrepreneur or CEO is a financial, manufacturing, or marketing expert. That’s why they assemble strong teams: to make sure every function of their company is supported by top talent.
Just Creative partners can be a powerful strategic partner in designing your NFT and backing it up with world-class brand marketing. From product naming to website design and social media management, our portfolio reflects our experience in a wide range of product categories. Schedule a conference with us and tell us about your vision. We’re here to help you realize it and profit in a dynamic marketplace that hasn’t yet reached its full potential.
Susan Doktor is a journalist, business strategist, and veteran brand marketing executive. She has hundreds of published articles to her credit. Susan focuses on personal and B2B finance topics, including cryptocurrencies and financial technology. Her contribution comes to us courtesy of Money.com.