How local businesses can use NFTs (with examples)

local marketing Oct 27, 2021
Graphic ext that reads NFT

I don't normally jump on trends that marketers like Gary Vaynerchuk and others promote, however, this post caught my attention because Gary was targeting authors specifically.

Gary talked about how NFTs (non-fungible tokens) can be a good fit for authors because fans of their books love to collect artwork and tchotchkes of the characters, events, and locations mentioned in their books.

He then mentions JK Rowling and her Harry Potter books. Watch the video below to hear what he said.

 

Out of curiosity, I decided to produce, mint, and publish an NFT for my book The Local Marketing Handbook.

(see below 👇🏽)

 

 

Working through this process, I began asking questions like:

  • How could a local business benefit from NFTs?
  • What type of local businesses would/could create NFTs?
  • What about NFT creation as a service?

Creating, minting, and listing an NFT was much more complicated than I anticipated. And that let me to write up this post to help you navigate the NFT landscape, and see if your local business can benefit.

My goals with this post are to help you:

  • Discover what an NFT is
  • See if NFTs are a good fit for your local business
  • Get through the process of creating an NFT
  • Help your local business benefit from creating and selling collectibles  

Let me start by quickly answering some questions for those who are new to this NFT phenomenon.

 

What is a non-fungible token or NFT?

In short, an NFT is a digital asset or collectible. As Sam Dean, a writer for the New York Times puts it,

"An NFT — which stands for non-fungible token — is like a certificate of authenticity for an object, real or virtual."

In other words, think of an NFT as a collectible piece of digital art that has a verifiable owner that is logged in a public ledger or blockchain.

When/if the artwork is sold or changes ownership, that public ledger (aka Blockchain) is updated and verified to prevent fraud. The art cannot be forged or stolen because there are tens of thousands of verified copies proving who the owner is.

 

Why do NFTs matter?

The short answer is because, now through technology, a digital asset can have a verifiable owner.

And if there can be a verifiable owner to a digital asset, then that asset can be sold or exchanged while transferring ownership through a public transaction just like you would a painting, sculpture, or any other piece of physical art.

 

Where are NFTs bought and sold?

NFTs are bought and sold on all kinds of marketplaces. Even Christie's, a world-renown auction house for art, is auctioning NFTs.

Most consumers can go to marketplaces online like OpenSea, Rarible, and SuperRare to find, buy, and sell NFTs.

 

Benefits of Selling NFTs

Now that we've covered the basics, let's talk about the process and possible benefit of creating NFTs for your local business.

 

What is the process to create and sell an NFT?

Unfortunately, this is not a simple process. In short, there are several steps to getting your NFT listed for sale on a marketplace.

Those steps will include creating the content you want to sell, having that content minted or added to the blockchain network, and then agreeing to sell that item using your crypto wallet.

If this sounds like a lot, it is! And the reason this process exists is because you are validating the uniqueness and ownership of a digital asset. Without this process, there would be no way to verify and authenticate your work.

 

How much does it cost to create an NFT?

To create, mint, publish, and sell an NFT does have a cost involved. What you actually pay will depend on which marketplace you use, what crypto wallet you have, and so on.

Remember this does not include the cost of having a graphic artist create an NFT for you, or the cost of software you might use yourself like Canva.

Here are the list of fees you should expect to pay:

  • Minting fees
    • The cost to enter your digital asset into the blockchain.
  • Listing fees and/or Commission
    • The cost to have the marketplace host and sell your NFT.
  • Transaction fees
    • The cost to move crypto currency from marketplace to wallet to bank account. 

 

Below is an great explanation from Joseph Todaro who breaks down the total cost of his experience and his net profit from a sale of one of his NFTs.

 

The fee amounts will vary depending on the marketplace and on the pricing for that particular day. Don't worry, there is a way to delay that initial cost.

OpenSea, an NFT marketplace, recently provided a way to create and publish an NFT for no initial cost.

Meaning the NFT isn’t transferred on-chain until the first purchase or transfer is made. Then, you'll have the cost of minting your NFT taken out. It's not a free solution, just a delayed cost.

The cost comes from the process of creating a contract and adding the NFT to the blockchain as it requires computer processing time. I strongly recommend reading this article for more information at OpenSea.

 

How can I create an NFT and sell it online?

This process will take a few hours at minimum and involves getting setup with a cryto wallet. Let's start by creating the content you want to sell.

 

Step 1: Use Canva to create your content

There are very few restrictions to what can be "tokenized" and sold in these marketplaces. To start, I'd recommend creating a branded piece of content that would appeal to your audience or customers.

This content can be a graphic, photo, GIF, video, meme, music, pdf, or any type of digital file. Think about what best fits your brand. An iconic location can make for a photo, or video, maybe with the original owners.

Canva can be used to generate your content and embellish it with animations, textures, headlines, text, filters and more. Once you have your digital asset you can export it as any file type you want.

 

Step 2: Create a crypto wallet

Which crypto wallet you decide to use can largely be determined by which marketplace you want to sell your NFT on.

If you want to use OpenSea, they support the following crypto wallets:

If using Rarible they have instructions on how to connect a crypto wallet and it looks like they support MetaMask, Fortmatic, WalletConnect, and WalletLink.

A crypto wallet will allow you to connect a funding account (bank, card, ach), and purchase, send, or receive crypto currencies like Ethereum, Bitcoin, and others.

These transactions require several levels or authentication for security reasons, so be ready to spend some time getting this setup.

Normally, I would recommend purchasing some Ethereum after setting up your crypto wallet. If you're going to use OpenSea's free NFT option, then you can skip buying Ethereum for now, however, keep in mind you will need to pay for other marketplaces.

 

Step 3: Connect a Crypto Wallet to a Marketplace

As I mentioned earlier, there are lots of marketplaces for selling NFTs. You will want to make sure that the marketplace you choose is compatible with your crypto wallet.

Connecting your crypto wallet to a marketplace will require multi-factor authentication, so be prepared to sit by your smartphone and email to get through the connection process.

Rarible and Coinbase's wallet do work well together as well as OpenSea and MetaMask.

 

Step 4: Price and place your art online

Pricing art is difficult, as the value really depends on the owner of the art. Consider your audience and then pick your price.

You will have the option to collect royalties every time your art is resold. This contract will follow your NFT wherever it lands, so consider this carefully. The default is 10%.

You can also limit the amount of copies are sold making your digital art more rare. All of these details will be embedded into the blockchain during the minting process.

 

Now that you know what it takes to create, publish, and sell an NFT, should your local business invest in this volatile new economy? I guess the answer depends.

Let's explore that question a little more.

 

How Local Businesses Can Use NFTs to Grow

What are some creative ways a local business can use NFTs to grow their brand and business?

The answer will depend on your niche and your audience. Below are examples of NFTs that could work for different types of local businesses.

You can find some inspiration from larger companies like Pizza Hut and Pringles, however, they are much larger companies, so you don't have to take the same approach as they have.

 

 

Example 1: Exclusive Photography of Iconic Locations

If you're a local business with a location that is iconic, historic, or nostalgic, try creating a digital photography NFT that allows fans to collect one-of-a-kind pieces of art.

Below are examples of local businesses with locations that this might work for.

Geno's Steaks, Maison Bourbon, and Nathan's Famous on Coney Island are all iconic local businesses.

 

Example 2: Artwork of Goods, Products, and Services

Art is subjective, so don't be afraid to modify photos using crazy filters, or asking a graphic designer to make something amazing on your behalf.

Below is a very rough example of how a florist might create collectible GIFS. Remember, NFTs can be any digital file format: GIFs, PDFs, JPGs, etc.

 

Example 3: Experience Based Local Businesses

Remember this is not just putting a GIF together and selling it (though, you will see some of that). The idea of an NFT is to create something that is a collectible piece of art branded by your business.

For an experience based businesses like escape rooms, or cooking class business, try creating videos that showcase the experience.

Improving the production and personalizing the video can allow you to include an NFT of each customer's class. This is like a digital version of that class photo.

 

Do You Need an NFT Marketing Agency?

As always, the answer is it depends. Finding a marketing agency that creates and manages NFTs can be a challenge.

The market is so new, and the return-on-investment can be difficult to measure, that many business owners and internal marketing teams may be better off figuring it out for your initial NFT.

If you gain traction and see this as an ongoing marketing channel, then you may want to look into an NFT marketing agency to create, manage, and measure your tokens.

 

Conclusion

When it comes to adding NFTs to the overall marketing strategy of your local business, being creative is key.

Start by thinking of digital versions of physical objects you use today to brand your business and improve the customer experience.

I hope this inspires you and answers your questions.

 

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