How much does it cost to establish a successful NFT collection?

 

With the boom in NFTs over the last few years, it’s a question a lot of entrepreneurs are asking.

The problem is that the information out there is kinda crappy.

 

I mean, the top Google result for this says you could create an NFT collection for a minimum of $150.

 

 

They justify it by saying this is the fee if you do everything yourself.

 

Personally, I think it’s BS.

 

Mainly because there’s a lot more that should go into creating a successful NFT collection.

Why $150 isn’t enough for an NFT collection

First off, the $150 price tag in the above is BS because it doesn’t include your time.

 

I mean, if we take the US minimum wage average of $11.80 then the $150 price tag means you’d be able to create the collection in around 12-13 hours.

 

If that was the case, everyone and their mum would have a collection.

 

That fee is what it might take to create one of those crappy NFT collections you see on OpenSea that has zero trade volume, insanely low floor price, and no real owners to speak of.

 

You know, the collections that look a little like this.

 

 

These collections probably cost $150 in expenses to create. And over their lifetime, they’ll be lucky to break even.

 

A good NFT collection is a business in itself. The best options out there solve a problem, build a customer base, and they keep people involved and excited.

 

So what exactly does it take to make a good NFT collection?

The elements of a successful NFT collection

I took a look at some of the biggest collections out there and analysed what it takes to create an NFT collection that’s not only profitable, but that people want to be a part of.

 

Market research

Here’s something I see a lot of smaller creations simply missing out on.

 

There’s no vision for the collection. Or more importantly, no utility beyond owning a cool image.

 

But when you look at one of the successful collections out there they offer something beyond the image to the user. Often it falls into one of a few categories.

 

1. Access to a specific community and IRL events

2. An Asset that can be used in other digital media

3. Discounts for stores and products from the creators

    

Let’s look at some examples.

 

World of Women offers IRL support and events

 

World of Women aims to support women in Web3. Holders of their NFTs get access to a real-world networking event every year as well as access to a supportive community.

 

 

Chain Runners are also metaverse avatars

 

Chain Runner XR NFTs are also doubling up as avatars for their metaverse, and it appears they’re also becoming filters on apps like SnapChat.

 

 

Crypto Baristas offer discounts on products

 

Crypto Baristas NFT holders get lifetime discounts on coffee and access to IRL events.

 

In short, your NFT collection has to have some form of utility.

 

2021 was the year of novelty images and animal derivative generative artwork.

 

Those things can still fly, but there has to be an underlying use and reason to buy into the project.

If there’s not the likelihood that the value will appreciate is slim, meaning your collection will fade and fail in the long term.

 

Finding a problem, a rallying cry for your audience, or creating a vision to build your project around is key to getting people on board.

 

Collections that don’t have this are doomed to failure.

 

Even popular collections that started out as simple images, later on, built community elements into the collection as a way to keep them popular.

 

If you want to find a rallying cry that will attract your ideal audience, there’s a lot of market research you’re going to have to do.

 

We’re talking interviews with your audience, research of the competition, and analysis of all the data. It’s a big job, but is absolutely fundamental to your NFT collection’s success.

Design

Let’s be honest, most of us are not good designers.

 

In fact, most of the competition out there for NFTs are collections that are poorly designed.

There’s a huge number of collections that simply rip off the popular artwork of something like a BAYC, make a few changes, and call it something similar like “Stoned Ape Bowls Club”.

 

If you search for “Ape” on OpenSea there are over 32,000,000 results. Almost all have nothing to do with BAYC or MAYC.

 

 

While some of the visual styles might be arresting, they are at their core derivative.

 

The best NFT collections are like the best brands. They have a specific visual style that is immediately recognizable.

 

You’re not going to get that recognizable style without some form of design expertise.

 

Sure, you could use one of the many NFT generative art tools. They might even help you get things off the ground. But really, you need a design expert to help you create something that’s unique and aligned with your ideal user base.

Marketing

Creating a cool visual style and having a vision that others could get behind isn’t enough.

 

They’re a great start and more than most collections can put together, but you need to make sure the right people see your message and what you’re trying to achieve.

 

You’re going to need to market your collection.

 

That means creating clear and concise explanations of what you’re trying to achieve.

 

It means growing an audience of people on free platforms like Twitter, and then getting them to your site or your collection listing page.

 

And it means making sure those people not only convert into paying members, but are also then advocates of your collection.

 

This is not easy and is a skill set unto itself.

 

And that’s just to get people in. Once you’ve converted them you’ve got to keep them engaged.

Community management

The best collections all have engaged and exciting communities.

 

 

Bringing people into the collection is one thing. Keeping them there is quite another and is a full-time job in itself.

 

Communities have proven to be one of the weak spots for scammers to target.

 

Good collections not only keep the community engaged with updates, info, and events, they also have a team of mods to help keep scammers out and make sure community guidelines are followed.

 

Good mods are hard to find, especially if you don’t pay.

Smart contract fees

All NFT collections are minted through smart contracts.

 

These contracts assign ownership and lay out the rules for transfers, resales, and so-on.

 

 

They are the core of blockchain assets.

 

You can use templates or bring someone in, but your collection has to have one.

Minting fees

So you’ve got your design and everything else in place to launch this collection.

 

Now you have to use a service to help you mint your NFTs. And again, it’s going to cost you.

Some marketplaces like OpenSea and LooksRare offer a minting service.

 

Other people go through separate tools to mint their collection.

 

The cost for each will be different based on a few key elements such as…

• The chain you’re minting on

• The tool you’re using

• Gas fees at that specific time

   

It will be different, but there will always be a cost.

 

There is an option referred to as “lazy minting” which postpones the payment until the first sale is made (and is likely the reason why there are so many crappy collections out there).

 

With lazy minting, you can list the NFT for free and the mint fee comes out of the first sale - which then eats into your profit margins.

Account fees

So you’ve gone through and minted your collection.

 

Unfortunately, the costs don’t stop here.

 

There are account fees charged by the marketplaces that facilitate exchanges.

 

• OpenSea charges 2.5% of the transaction.

• LooksRare takes a 2% cut.

   

Neither is a large cut, but it’s yet another cost people aren’t mentioning.

The true cost of creating an NFT collection

Let’s get away from the generic overview of what this could cost and start adding real numbers into the equation.

 

I’ve spent several days researching agencies and freelancers for all of the key areas of creating a successful NFT collection.

 

I reached out to many, and had some of them kindly respond with the details of their rates.

 

The result is a basic data set of fees for each service needed to launch a successful NFT collection.

 

My research has highlighted that there are really 3 different levels and costs for doing this.

 

1. Doing it all yourself (software costs to enable you to do the job)
2. Hiring individual freelance specialists whom you’ll have to manage (will require you to manage the process)
3. Outsourcing the entire thing to specialist agencies (they handle everything for you)

 

I’ve listed the averages for each level under their section.

 

Bear in mind, these costs are all hard costs.

 

Specifically the cost of goods and services.

 

With each there will also be soft costs.

 

The soft costs being the time you need to manage the system, process, and people.

 

If you’re doing it all yourself, there’s a far higher soft cost.

 

The cost is somewhat middling if you’re hiring several specialists you intend to manage.

 

And much lower if you hire expert professionals who will manage the process for you.

 

You’ll also find that some of the full-service agencies will offer one or more of the services within a package deal. I’ve left the section breakdown with the cost for that service.

 

However, the total breakdown takes the various discounts for bulk orders together for you.

 

And finally, if you’re hoping to create something like the next BAYC, you’re going to need to think in huge numbers. I dread to think how much those super successful collections have spent.

 

Let’s get into the prices.

Market research to identify the utility of your NFT

Estimated cost:

• DIY - $300 (plus cost of your time)
• Professional service (average) - $2327
• Professional service (high-end, fully managed) - $10,000+

 

I’ve spent a good deal of my professional life as a conversion-focused copywriter.

 

Here’s the thing about copy few people seem to realise.

 

It’s not at all like Mad Men. You don’t sit around all day throwing quips and snazzy one-liners out there, then pick one you think will stick.

 

In fact, good copywriters lean - heavily - on detailed research.

 

When I was creating new campaigns and strategies for clients it would take weeks.

 

Weeks not of writing and rewriting copy, but of interviewing everyone from…

• Customers
• Key stakeholders in the business
• Sales and customer support leaders who talk to potential customers on the daily

 

I’d collect as much of that information as possible. Then you organise it, rank and rate the feedback, and look for patterns.

 

You’d end up with a tracking sheet that looks like the below.

 

 

Your job is then to look for pain points, desired benefits, shortfalls in existing offers and other key elements.

 

Specific focus is put on ideas and talking that come up more often. The more people mention something, the more important it is.

 

This is a multi-week or multi-month research process. And it requires the payment for various tools including those for outreach, call booking, call recording, transcribing - and of course your own time or that of an assistant.

 

You could outsource this, but I used to charge up to $10,000 for this service and the subsequent copy it would help me create.

 

If you’re launching an NFT collection into the market, you want to make sure that it’s going to be well received.

 

You can save on the cost of paying someone else, but you have to consider how much your time is worth.

Designing your NFTs

Estimated cost:

• DIY - $100 (plus cost of your time)

• Professional service (average) - $3128

• Professional service (high end, fully managed) - $10,000 - $20,000

   

 

Artwork is the core branding asset for your collection.

 

Show someone a stylised picture of a monkey - they know it’s a BAYC (ro a ripoff). Show someone an 8-bit person with an attitude, they know it’s a Crypto Punk.

 

Art is super important for your NFT collection’s ability to stand out.

 

You could go the super low-cost way and try to handle it yourself. If you’re an artist, you could use something like Procreate to create all of the assets yourself and then compile them in layers with a relevant service.

 

Or you could use a “DFY” service like The NFT Generator.

 

 

These are the cheap options.

 

And I really only think the Procreate version would work if you were a decent artist to begin with.

 

The generative “DFY” services don’t really strike me as creating anything worthwhile.

 

You could also hire an agency that specialises in this sort of thing.

 

This would solve a lot of the headaches you might have as they have existing expertise.

 

And finally, you could hire an NFT artist or art team to handle this part of your NFT.

 

I would vote for option 2 or 3 unless you’re a skilled artist who can create really unique artwork.

Marketing your NFT collection

Estimated costs:

• DIY - $200 / month

• Professional service (average) - $9,416

• Professional service (high end, fully managed) - $10,000 - $60,000

   

 

In my years in marketing, one of the biggest mistakes I often see are owners and founders who take the Kevin Costner approach to a product.

 

They believe that if they build it, the customers will come.

 

But it doesn’t work like that.

 

To get the word out there, you’re going to need to hit the marketing side of things hard.

 

You’re going to want people expecting and excited for your pre-mint…

You’re going to want established collections talking about and linking to you…

 

Keeping your own brand’s socials and presence updated and engaging.

And of course extra needs if you decide to implement some form of paid advertising.

Marketing is hard and time-consuming.

Community management for your NFT collection fees

Estimated cost

• DIY - $200 (plus cost of your time)
• Professional service (average) - $2070 / month
• Professional service (high-end, fully managed) - $2500 - $5000 / month per person

 

If your marketing is a success you’ll have people within your community.

 

You’ve got to ensure that it remains active, offers value, and that you’re keeping spammers and bad actors out.

 

You’ve also got to grow it and successful “sell” your product to those who haven’t yet bought.

It’s a huge time investment that, honestly, is super difficult to manage.

 

Even if you go with the absolute cheapest option of doing everything yourself, you’re still going to need software tools to help you manage the community.

 

Logging into Discord, Twitter, Telegram and whatever other community services you use manually is too much of a time sink.

 

Tools are needed to do this effectively.

 

I spoke to a few community managers and the general consensus was that, to run a successful community, you’d need the below at the very least.

 

• Discord bots
• Social media scheduling and management tools
• Engagement tools (giveaways etc)

 

All told, those kinds of tools will run the average person around $200 / month at the very cheapest.

Now, you could also hire a specialist to fully handle all of this.

 

And from the people I’ve spoken to, you’re looking at costs anywhere from $1000 to $3500 / month to have a specialist, dedicated community manager handle this for you.

Getting a smart contract created for your NFT creation

• DIY - ~$150
• Professional service (average) - $6,333
• Professional service (high end, fully managed) - $10,000 - $100,000

As mentioned earlier, smart contracts are super important as they form the foundation of action through buying and selling, ownership, airdrops and so much more.

 

You can use a service like Manifold.XYZ to create your smart contract for “free”.

 

They apparently charge 0.03 ETH in gas fees.

 

I’m sure it’s a great no-code tool to help people like me who are non-technical get it off the ground.

 

However, my experience with tools like this is they’re great for smaller operations that don’t need too much customisation.

 

These tools appear to be used to create a contract that works solely with existing marketplaces.

There is another option though.

 

If you want more personalisation within your smart contract and have it do things like enable people to mint an NFT from your own website like Sakoso Monsters…

 

 

… or have a built-in community area and marketplace like BlockBar, you’re going to need someone to create a custom contract that syncs with these elements directly.

 

And that’s going to be costly.

 

You’re looking in the mid-thousands to low tens of thousands for this.

 

Both are valid options.

 

And while one is cheaper than the other (by a large margin) it’s still going to cost you more than $100 (depending on ETH price) and the soft cost of your time.

Minting fees

Estimated cost - $0.01 - $2.00 per NFT minted + gas fee

 

Mint fees are an odd thing to calculate.

 

There’s no one set number for this as there are a lot of variables in the mix.

 

The below are going to drastically affect the price of your NFT collection mint.

 

• The blockchain you use

• The number of NFTs you’re minting

• The gas fees at the time of mint

   

These elements will have profound effects on the cost to mint the collection.

 

You can reduce these costs by using features like Lazy Minting, but all that does is push the cost to later in the pipeline when each NFT is sold.

 

It’s annoying to not be able to give even a range of pricing for this.

 

As such, I’m going to assume the highest end of mint fees ($2), and a small collection of 100 NFTs + the lowest gas fee from public sources $1.

 

That would add another $300 to each and every method of minting your NFT collection.

Account fees

Estimated cost:

• All levels - 2 - 7% of sales

In addition to paying to mint your NFTs, you’ll also need to pay some form of account fee depending on where you sell your NFT and how you created the collection.

 

It’s here that you’ll tend to notice those who have relied on third-party services to do the heavy lifting for them tend to get screwed.

 

If you rely solely on the marketplaces, you’re looking at low single digits % commission (2-2.5%).

If you also used a tool like KoalaMint to create your smart contract, you’re looking at an additional 5% per sale.

 

The people I researched and spoke to often said they’d charge a small % of the mint revenue.

The most common was around 1% of mint revenue.

 

So, if you’re hiring 4 specialists, you’re looking at around 4% of sales in fees to your team.

If you don’t have a custom marketplace, that’ll be in addition to the 2% platforms like OpenSea charge.

Total cost ranges to create and launch a successful NFT collection

So let’s add everything together.

 

I’ve taken the averages of everything and added on the fee for the mint costs we outlined, those being at the cheapest rates for a 100 NFT collection ($300 total).

 

The total cost for launching a successful NFT collection is…

• Full DIY - $850
• Average cost of using freelancers you manage - $23,274
• Outsourcing entire tasks to full-service development houses - $42,500 - $185,000

 

These are general, average costs.

 

Your project will have unique needs. And that could bring you in at the bottom end of the scale, or at the very top.

 

In addition, you’ll have to factor in the % commissions charged by platforms and founding members which will be between 2-7% on average.

 

And finally, there’s the soft costs of your time and how much that is worth.

NFT collection creation cost by task

As a final data experiment, I wanted to see these numbers broken down as a percentage.

 

I took the averages for all service level by NFT collection creation task and created the below graph.

From the data that I’ve been able to find, it appears as though the budget for minting an NFT collection breaks down as…

• 45.5% goes into the smart contract

• 31.1% goes into marketing

• 13% into the design

• 6.6% into market research

• 3.8% into community management

   

I’m a little surprised by some of this.

 

Firstly, I thought community management would be a bigger percentage as the community is the foundation of the collection's success.

 

I assume that it appears lower as a lot of the marketing tasks are there to grow the community.

I’m not at all surprised that the smart contract creation is #1.

 

We’ve heard too many times about people who have failed to create secure smart contracts and have had them hacked and/or exploited for millions of dollars.

 

As the smart contract decides the basic and complex actions of your collections behaviour, it should be one of the primary costs.

 

Design is also surprising to me. I thought it would be a little more. However, i guess that as most NFT collections use a generative approach it’s not as big a piece of the budget compared to creating even a small collection completely manually.

 

If you have data to support or refute the claims here,. I’d love to see them and use them to update this.

 

The goal here is to have a living, updated, and completely relevant breakdown of costs to stop people expecting to get a complete NFT collection for $150.

Special thanks to these people for helping me understand the real costs of setting up a successful NFT collection.

While I did a lot of research myself - spending hours trawling through sites, services, and platforms to find average costings for each need - I also had some professional help. I want to extend my profound thanks to the below people who shared their average rates for their specialist area in confidence.

 

Without these people, this whole endeavour would have been entirely theoretical.

• MetaMooch.io
• Growth Models
• Taran M.R‍
• Oliva Jefferson‍
• Nikos Fratzeskos‍
• Cude Digital ‍
• Moonlanding media‍
• KoalaMint‍
• Blockchain App Factory‍
• Cryptovirally‍
• Prolific Studio

Price Research Methodology

The above-linked people helped out immensely in this process. They provided their average fee for their respective services which was then entered into our primary data set.

 

The add to this, we also Googled for publicly available pricing from various services. Where possible, the prices were added to our data set.

 

Finally, we searched publicly available pricing from professionals on various job boards and portfolio sites. We took the median of their last 10 relevant jobs (minus major outliers) and entered it into our primary data set.

 

We then used these numbers to get an average for each and every service.

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