Why Your NFT May Not Sell
Tags: Nft, Nft Collectibles, Nftartist, Nft Marketing

Why Your NFT May Not Sell

Insights about how to drive more NFT sales

As a heads up, I don’t claim to have all the answers. I don’t have a Fidenza, nor a Bored Ape. I’m not a Cool Cat, nor do I have a podcast about NFTs. One day, I hope to have some of these things (and more)…

For now, I am a market participant who has been in dozens of discord, written, hundreds of tweets, minted many cool NFTs, engaged with numerous artists, etc. At the end of the day, I identify as a maker, a designer, and a marketer. It’s through these lenses that I wanted to write this post, which I hope will help shed some light on the difficulties some collections seem to face.

Through learning from each other—measuring twice and sawing once—I believe we can create an even better space for years to come.

With that out of the way, here are my insights:

Artist is Not Well Known

This is inevitable for many new artists. If a new artist is not well known, then there is a high likelihood that people will pass on art, even if it’s good. It’s the chicken and egg problem.

I know, me myself, I will look at how popular an artist is on social media as one of many purchasing factors.

If the art is great, in the eye of the consumer, then there’s a good chance a buyer may come along and buy some of a collection, but this is a big if.

One of the ways I’ve seen artists become more well known is by using giveaways to boost social signals, and contributing to the broader community. Many artists are able to build out larger profiles simply by being helpful, sharing their art, recording process videos, etc.

Another big way that artists generate notoriety is by doing things differently,—offering a unique take on what’s currently available—and offering utility to holders (more on this towards the end of this post).

@GxngYxngNFT’s story of a relatively unknown artist pricing work at 0.001 Ξ to NFT stardom is a perfect example of how these different methods can be used to enhance popularity.

Lack of Social Media Presence

Related to my previous point, a huge part of the NFT space is driven by social media — so much so that if an artist doesn’t have a social media presence, people may question the validity of their project.

A lonely activity button on OpenSea

For the most part, I’ve seen Twitter and Discord as two main sources of information in the space.

Discord and Twitter represent a way for potential consumers to get in touch with artists in ways that many other platforms can not. Some consider communication with a real person in their decision-making process towards supporting a project.

Not everyone can spend time managing social media, nor have the time and ability to do so. Without having an online social media presence, though, many people will simply pass on a project.

Lack of Community

Even with social media accounts, some artists neglect the community-building aspect of social media.

A small but necessary ritual

More than ever, people want to feel like they are a part of something. If they go into a Discord channel and see a handful of people with no recent chats, they may pack up their bags and go elsewhere.

Engaging with potential consumers can be a great way to bolster confidence and get more people excited about their project. Even if it’s not monetary support, word-of-mouth can go a long way in terms of getting NFTs to sell.

Using bots that welcome new users can be an easy solution to providing a welcoming atmosphere, until an artist or moderator can get in and chat personally.

Social media can be hard, but once it gets going, it can be hard to stop.

Interviews of large Web 2.0 companies have shown that it just takes a dozen or so active users to create communities that don’t feel empty. With a little elbow grease, a community can turn from crickets chirping into something vibrant and ever-growing.

Supply Exceeds Demand

One big detriment to sales is a potential collector coming across a huge supply.

The collector navigates to a collection and sees a wall of “unpurchased” NFTs. They see something they might like, but ultimately decide to leave.

Having a huge supply might seem like a good thing at first as people have selection, but in this market, many people will leave when faced with high supply(as they often want to see some appreciation in value of their purchase).

One of the signals that collectors may look at is the rate by which a few purchases can significantly boost the floor price:

If a floor price is currently set at 0.05 Ξ, and there are dozens of pieces roughly around this price range before 1 Ξ, it will take collectors a while to chip away at the floor until a larger valuation is found. In another case, imagine that there are a similar number of items in a collection but that the lowest floor prices are 0.05 Ξ, 0.1 Ξ, 0.5 Ξ, and 1 Ξ. A buyer may find this collection more attractive because a single floor purchase moves the entire floor price by significant multiples.

Roadmaps have a weird way of both helping and helping NFT projects. They can help provide some clarity in terms of direction, how many items in a collection there will be, when drops will happen, etc. They often can create a struggle for artists who, in striving to maintain a regular posting cadence, fail to take into account increasing supply.

Each week, new pieces may come out, but if they’re not being purchased, supply increases and the desire for many to purchase diminishes.

Some good practices I’ve seen are resisting a regular cadence/roadmap (unless demand is being met, of course), and sometimes posting once a week or only when there is demand. The upside of focusing on a smaller set of NFTs is that one can more easily market them and make the NFTs feel special.

Looks… Not so Rare

Art is subjective. Is this valuable? Is this rare?

Some NFT collections that don’t sell well fall into a category where most pieces look mostly alike. Tell me which of my eyeballs looks rare?

I spent more time on these images than I should have…

If you had said the last one, you’d be correct because it is a downward-facing eyeball (although ultimately because I decided that it was rare). Sometimes, artist will use color as a differentiator, but this often creates a similar situation where rarity can be hard to distinguish.

Again, which is the rarest?

Who here has red eyes?

This time, the first one, red, is rarest again, because red is the first color in ROYGBIV. Hopefully, you can see how color doesn’t help that much in terms of clearly making an NFT feel rare.

Take a look at this last set of images. Which one is rare?

“Looks rare”

In a way, they all feel rare. The first one is simple, which could be thought of as a rare trait. The second image has a lot of angles. The third image as a dot that’s offset.

The goal is for each NFT in a collection to look rare, so that people can apply their own sense of value without distraction.

Rarities Not Left to Imagination

Sometimes collections will state rarity, which seems to betray the fact that every NFT in a collection should be “rare.”

Sometimes the rarity is listed in the metadata or in the title.

Sometimes, rarity is even included as a part of the graphical representation of the token.

Five stars = so rare!

Sometimes artists list rarity as a way of artificially making something feel more special.

Sometimes rarity is a measure of how much work something took to complete: an animated GIF might be more rare than a static image in the same collection.

Many collectors inevitably want to collect the NFTs that are rare.

If an artist says that X tokens are rare, and the rest are common, more likely than not the rares will be bought out, and the commons will be left.

Future buyers that come along will see that there are rares in a set, only to find that they’ve been bought up. If the commons don’t look significantly special enough for a person to buy them, they will move on.

Exceptions to this concept of defining rarities might be editions and thousand-plus PFP collections. 1:1’s will naturally be more rare than any multiple as only one person can own that token, but the NFT itself does not have to state that a 1:1 is rare.

For PFP collections, collectors often want trait lists and counts to be able to more easily determine what is rare and what is not. Collectors can look through thousands of NFTs, but that’s often not appealing to do manually. While collectors can look at percentages to determine rarity, it doesn’t seem to help to list rarity level as a trait.

Here are a few collections where every piece, as a collector, looks super rare: Ilyakazakov, Arq Skulls, and Drooling Bear.

Collection Continuity

When people are viewing collections, they often want to understand what makes a collection a collection. I can say this broad swath of work below is a collection, but it can hard to see why:

Thanks Blitmap!

Maybe I do pixel work. Maybe I do geometric art. These should probably separate collections so that people viewing any one of these items can understand the relation with each other—and determine value:

Bet you thought you’d seen the last of me.

It’s much easier to come to a conclusion of value if items in a collection are more related than they are different.

Long Long Cat is a fun collection that does things right when it comes to continuity. All of these cats fit, even though they run the gamut between 404 error to rice ball.

Marketing Too Hard

This is one difficulty that has a ton of nuance to it.

Imagine an artist replying to various threads out there with their collection to get the word out. The same post is made again and again.

While this might be good to get more eyeballs on a project, collectors may see this and wonder if the project has merit or demand even.

Though it’s good to be self-promoting, it’s even better if promotion can come organically from collectors or those interested in the project.

Many of the collections that continuously sell out have a wild and steadfast following that is more than willing to share the virtues of a project with others.

Marketing Too Little

The flip side of marketing too hard, is not really marketing at all. I’ve heard of many collections that decided not to advertise on proper channels because they thought word of mouth would carry them to victory.

In a crazy NFT bull market, this may be the case, but this may also be the exception to the rule.

Properly selling a collection can make the difference between a drop with gas wars and a drop with crickets chirping.

Some of the best collections that I’ve seen market well are ones that drum up excitement. Maybe there is a new collection coming. Weeks, if not months before, these collections are already dropping hints of something big to come.

Maybe there is a blacked out version of an NFT in a collection, maybe there is a puzzle that is created for followers to solve that will provide a clue to the collection.

I may not know what this is, but I sure want to find out.

There’s any number of ways to drive up interest and get people waiting at the door when it comes time to drop.

Convoluted Marketing Assets

Sometimes the best marketing is simply putting the piece up for others to see.

Too often, images that are posted to social media are complicated, have tiny versions of the actual art, and run into the issue of advertising supply versus demand.

Sometimes, this is done to show how much of a collection has been sold. Having sold on a bunch of individual items is cool, but it doesn’t allow people to easily see what has been sold or what is left to buy.

If an NFT has animation, it should be shown in the marketing asset used. Static images are just doing a disservice to the art.

If multiple items are being posted in a collection, it may be good to just post a select few items at once or even do multiple posts where each piece is showcased with added commentary.

There’s no need to get really technical, but if one is creating a specialized format for posting art, then there’s info about this.

I really like how @artistthebob has created a template that showcases the art in a way that is uniquely them:

Here’s a giveaway template

Here’s a template featuring the two available NFTs for the day

This artist doesn’t overcomplicate things, allowing the art to shine!

Self-Minting

I’ve seen many projects out there that are generative, but the mints occur singularly by an individual artist. It’s so easy, in this case, to only mint the outcomes that seem favorable as opposed to what many in the space enjoy—NFTs that are generated visually at mint by collectors.

Many of these collections end up, not only having a huge supply issue to deal with, but also no real way to verify minting claims. In the end, hundreds, if not thousands of NFTs sit with hardly any collectors willing to buy.

The solution I’ve seen here is to put the minting in the hands of collectors. The NFTs are placed directly into users’ wallets, who are then responsible for assigning their own value to the tokens.

Style is Too Niche

Oftentimes, artists will create art that speaks to their own interests—which is great. Sometimes those interests don’t exactly align with what collectors want.

This is where some artists run into issue. This doesn’t mean that the art is bad (the art objectively can be amazing), it just means that the pool of available collectors willing to buy the art gets smaller and smaller the more niche the art becomes.

People love eyeballs, right?

The value of art is determined by everyone’s unique preferences. If a collector likes cats, but not dogs, cats are going to be more valuable.

An artist that has a dog collection, probably won’t capture the interest of the cat person as much—translation, fewer sales.

Of course, this doesn’t mean that an artist should not create art that is very niche like photorealistic plants made from ASCII characters with googly eyes, but it should be noted that the available pool of interested collectors gets smaller the more niche art becomes.

Lack of Hodlers

Another reason that items in NFT collections fail to sell is a lack of collectors wanting to hodl their investment. Some of the hottest collections out there suffer from flippers looking to buy low and sell for a modest or even high profit.

People quickly getting in and out presents a situation where, all too often, collectors who would otherwise want to hold onto a piece are priced out. This leads to a situation where, if there isn’t enough demand still, floors drop little by little until a buyer is found.

Collectors generally don’t want to see a dropping floor (nor be priced out), so many will move on.

Some of the best collections out there get art in the hands of collectors who want and will retain them for as long as they can.

Probably the best situation to be in is to have art that a collector will seriously reconsider after selling.

CryptoPunks and BAYC are both in the same category (albeit on the extreme side) of an NFT collection where owners seriously need to consider the repercussions of selling due to the community, utility, and notoriety involved in holding.

Blockchain Choice

If Tezos is a lithograph, then Ethereum must be high-quality stretched canvas.

Besides what statement choosing a chain tells, people use blockchains that they are familiar with. A large majority of these users currently use Ethereum as their main source of NFT activity. Of course, Ethereum comes with issues of high gas fees and periods of unsustainable activity.

gg to anyone trying to transact during the The Sevens mint

Layer 2 solutions like Polygon aim to solve the issue of gas, but usage is dependent on users bridging their Ethereum over and transacting in Eth on Polygon.

For now, activity on various chains is isolated, which means choosing a good chain is key. Even with the gas savings involved by using Polygon, there may be fewer collectors with Eth on Polygon and fewer willing to make that bridge to Polygon.

Language Barrier

If people can’t understand what an artist is creating, it may be hard for people to get on board with what that artist is offering. Sometimes art can transcend the barriers presented by language, but many collectors will often want to come back to some kind of understanding of where the value is.

For many collections, the value comes in terms of the community and vision of how a project will unfold (wen roadmap). If someone joins a discord and they aren’t able to really communicate with anyone there, it may be hard for collectors to want to hang around, even if the future is grand.

To Link or Not to Link

There are many collections that get promoted online, but some of these promotions come without a link. Inevitably, someone interested in the collection has to search for a link or ask for it from the person posting.

It should be common practice to include a link in these types of posts (either within the post itself or as a comment), so that people can easily access a collection.

Using Unfamiliar Links

Speaking of linking to a collection, another subsets of posts advertising collections provide links, but do so in a way that is suspect at best.

Many in social media use link shorteners as a way of reserving characters for content, as opposed to long urls.

On Twitter, ever since the limit of 140 characters was changed to 280, using a link shortener hasn’t been as necessary.

Still, some on social media prefer to use link shorteners like Bitly, which provide a shortened link that redirects to a designated url.

In a space rife with scams, using links that aren’t easily understood can provide more questions than they are worth. It’s so easy to use a link shortener to direct to a fraudulent website, all because the user wasn’t able to validate the domain name and url structure.

Pricing

Most collectors want to see some kind of return on investment. Calculating what a potential return may be ultimately involves understanding the price purchased and what the value may be in the future. As a result, price is a huge factor in determining whether an NFT gets sold.

Price too high and people may not want to make a purchase.

I don’t see why people would pay so much for this NFT.

= low demand, high price

Price too low and people may wonder about the value that is being provided.

Seems like no-one is interested in this art even though it’s super cheap.

= low demand, low price

As a conundrum, price it on the higher side and people may see potential for a higher ROI.

Looks like whales enjoy this type of art. I want to get in.

= high demand, high price

Similarly, price it on the cheaper side and people may think that the price is a steal (ie. realizes a higher potential ROI).

Who wouldn’t want to buy this NFT at this price? It’s easily worth 20x.

= high demand, low price

The difference between these situations is demand. Pricing should be a function of demand.

If there is higher demand, then price can probably be increased.

I’ve even seen some Discord chats where members mention to the artist that their NFTs are worth so much more than what is being charged. This might be collectors trying to protect a floor price, but it could also speak to collectors seeing value that an artist might not yet understand.

If there is little demand, it may be wise to start at a lower price point or consider holding off on increasing supply (until demand reaches supply at least). This is where desire to satisfy a roadmap sometimes runs into conflict with generating more sales.

Pricing overall is a pretty intricate balancing act, but one that seems to get easier the more collectors are involved.

After all… more collectors creates a large community, which creates more people who can market a project, who bring in more collectors…

Pricing Relative to Gas and Changing Currency Value

I wanted to add this additional section, since it’s become apparent that people are less likely to buy when transaction fees are high. It also appears that though 1 Ξ = 1 Ξ to many, for new entrants, 1 Ξ = whatever entry price they can get (making buying at higher Eth levels harder to justify).

I’ve seen many collections with starting prices in the 0.01 Ξ to 0 Ξ range.

Many of these collections don’t have buyers currently.

Why?

Even for a free mint or free purchase, the buyer is looking at using around 200,000 gwei at a gas price of around (say) 100 to process the transaction. The resulting cost is 0.02 Ξ on top of whatever the price of the token was.

The collector needs to have even stronger conviction in a project or artist to justify the fees since the fees are more expensive than the NFT itself. Even in a case where the token is more expensive that 0.02 Ξ, the amount of Eth consumed by gas can represent a significant portion of future gains.

On the value of Ethereum increasing (or decreasing for that matter) relative to the price Eth was purchased at, new collectors will look at a price like 0.1 Ξ differently than those who have been in the space for some time. 0.1 Ξ may be $4, $40, or $400 depending on when Eth was purchased.

Thus, in terms of sentiment, for the $4 collector, purchasing an amazing piece for 0.1 Ξ may make total sense. For the $400 person though, maybe not so much.

One solution to gas and increasing Ethereum prices has been migrating new work to L2’s like Polygon or moving to alternative chains like Tezos or Solana. Here, gas fees are much lower and the currency price seems to be more stable, for now.

It will be interesting to see how gas fees and changing prices continue to have an impact on the NFT market, especially as new people enter the space.