Learn how to leverage the various auction mechanisms and collaborate with other artists
Pricing your work properly and leveraging the right auction mechanisms is crucial to attracting collectors and getting the price you want. In general, artists should initially leave their artwork open for bidding after listing it. This is a great tool for price discovery as collectors can outbid each other based on their personal perception of the piece’s value.
It’s important to have a price target so that depending on the action on your piece, you are ready to accept an offer when it reaches satisfactory levels. Open bids can also lead to quickly escalating bidding wars, resulting in higher prices for artists. So, it’s their responsibility to evaluate these dynamics.
In some cases, artists might not receive the bids they were looking for with the open bid approach. If it’s been a few days or weeks without bids at the expected price, the reserve auction mechanism becomes a great strategy to attract the attention of collectors. The reserve price indicates exactly what bid is required to start a 24 hour countdown.
The artist can play with that price. For example, by indicating a lower price, they can spark the interest of collectors and generate a bidding war. Reserve prices don’t guarantee a bidding war or that the piece will attract the required bid in the first place, but they remove some of that price discovery at the benefit of transparency.
If the reserve auction fails to attract collectors after a few days or weeks, artists can always resolve to a list price or a “Buy Now” option. This removes the potential for bidding wars and can indicate to collectors your eagerness to sell which can lead to smaller bids in the hope they are accepted. While the list price strategy can work well for multiple editions, it is suggested to reserve a price as a last resort for 1/1s.
As a rule of thumb, artists should always look to increase their floor price denominated in ETH from one sale to another so that collectors are rewarded for supporting them and the artist’s value can grow over time. Though, market conditions should be considered and can influence how the floor price is considered. In a market where ETH is rising steadily, artists might have to result in reviewing their floor price in dollar value instead of ETH.
Crypto art is a collaborative space which brings artists together. Artists of varying status often partner up to collaborate on artworks and as such, it’s important to set a standard for how the revenues from a sale will be split.
Artists and musicians alike should always split the profits equally unless the level of work provided by each party is expected to differ significantly. This way, artists involved are empowered by the collaboration and it can act as a springboard for their career by exposing themselves to a new collector base.