How To Flip NFTs In 4 Steps Like an Expert
First of all, were glad you're doing research before you blindly try to figure out how to flip NFTs!
Can an NFT be bought and flipped for profit same day? If the NFT collection you're flipping has the right recipe for success, then absolutely it's possible.
Even if you're new to the NFT world you've still probably heard the term "flipping" and its pretty much the same concept. We know, we know, it's much easier said than done. We made this guide to help you flip NFTs like an expert in 5 steps, while avoiding the scams in the space.
What is NFT flipping?
Before we give you the play by play on flipping NFTs, you must treat it like any other investment. Dont invest what you can't afford to lose.
According to Investopedia, "Flipping is a term describing purchasing an asset and holding it for only a short period of time before re-selling it. It is meant for quick profits." The term is not just for NFTs and almost anything with value can be be flipped. This includes real estate, stocks, instagram usernames. Heck, even candy can be flipped.
Theres not much difference between any of those items and NFTs when it comes to flipping. The game plan is the same for all of them. Buy low, sell high.
How to flip NFTs in 5 steps
Flipping assets can be risky, 15 minutes can make the difference between being up $400 or down $100.
As your probably already know, we use OpenSea so that's what we will refer to in examples.
We're here to put you in the best possible position by telling you what to look for, how to spot value, access to free tools, and how to use the stats to your advantage. Basically the full playbook to why people buy NFTs.
Step 1 : Find an NFT collection to flip
Can an NFT be bought and flipped same day? If the NFT collection you're flipping has the right recipe for success, then absolutely it's possible. Here we'll dive into different aspects that makes an NFT collection valuable and worthy to flip.
As you already know, we only talk about platforms/things that we personally use, so we will be using OpenSea as the NFT marketplace example in this article.
Checking out the trending page on OpenSea is a great way to get a ~feel~ for which NFTs might be a good flip. On a single page it has important stats such as volume, floor price, number of sales, and % change over a day/week
Supply (number of NFTs in circulation)
One of the first things you want to check in an NFT collection you want to flip is the total supply. People buy NFTs for different reasons, one of them wanting to feel "exclusive" or part of something.
Now think about it, what feels more exclusive : a club with 50,000 members or a club with 2,000 members?
We're not saying that an NFT collection with a high supply can't be valuable, but if its a larger collection that means the demand also needs to be larger than the supply. The basic rules of supply & demand apply to any item you are trying to flip.
There must be more demand than supply. If there's not, keep looking.
Number of NFTs listed for sale
Digging deeper, the next key stat you want to check for is how many NFTs are listed for sale. This, in hand with amount of sales, is a good indicator of the supply & demand for a specific project.
If an NFT collection has a high percentage of NFTs listed for sale that tells you multiple things. First of all, people want out of the project. If this is paired with low volume/amount of sales then its a recipe for a loss. If people arent buying what people are already selling what makes you think youll be to resell yours for profit?
On the other hand, if a project has a low percentage of NFTs listed for sale that is a great sign! This means people dont want to sell their NFT right now, which also means its probably for good reason. If this is combined with high volume/amount of sales
Volume / Amount of sales
One key factor when deciding which NFT collection to flip is how much liquidity there is. This is important because it tells a clear sign - either people want to get into the project or they don't.
If an NFT collection only has a couple sales in an hour, or even days at a time, that tells us people aren't willing to give up an arm or leg to join the project. Proceed with caution because you don't want to buy one of the NFTs, put it up for sale, and it get no attention. Although this may be true, collections with higher floor prices will naturally have less total number of sales.
One thing I personally like to see is at least a couple trades in the past 5 minutes. If there's trades being made every minute, that's a positive sign but you have to keep looking even further.
Unique Owner %
Ok let's say you found a collection that so far has a nice size supply, low percentage of NFTs listed for sale, and decent volume. What's the next sign?
Even though the project has decent value, there's some malicious actors out there they want to fool you. Just because you see sales every minute doesnt mean its what it looks like on the surface. What some people do is hold a large % of the total supply then sell them off.
If a project has a high percentage of unique owners (different wallets) then odds the value of the collection is legit, rather than artificially pumped.
Floor price
One of the last things to consider, although there's no right or wrong, is the projects floor price. This really comes down to how much you're willing to invest, and be ok with losing.
It is important to note that a blue chip NFT floor price will be significantly more than almost any other project, however they are seen as more stable for a longer term investment.
Step 2 : Find value in the collection
Now that you've done research on NFT collections it's time to actually find the individual NFTs within the collection to flip. It doesn't matter if the collection you chose has a supply of 2,000 or 10,000, chances are there's a couple undervalued NFTs listed for sale.
They're just waiting there, waiting for the next NFT flipper to come swoop them up. But how can you tell which NFTs are undervalued or overvalued?
One method that we use is applying the filter "buy now" and sorting by rarity.
Unfortunately you can't sort by rarity on OpenSea (yet). There's many websites out there that do this but we typically use rarity tools.
Sorting by "buy now" and rarity at the same time allows us to see which NFTs are being undervalued. For example, If a top 30% rarity NFT is selling amongst the cheapest in the collection, that's an instant flip right there!
Step 3 : Buy the underpriced NFTs
Now that you have a list of a couple NFTs you might want to flip, its time to buy the undervalued ones. The process is fairly simple, all you have to do is connect your NFT wallet to OpenSea by clicking the big "connect wallet" on the top right
Buy the NFTs that are rare, but listed cheaper than the average selling price of that rarity tier. If it is listed significantly cheaper, theoretically, you could buy it then re-sell it for a couple dollars less than the next cheapest one. This also means it probably will get bought quickly after its been posted for sale, so trust your research and pull the trigger!
Similar to the rare NFTs listed for cheaper than the average of its rarity, also purchase the ones that have the highest margin between the two lowest "buy now" for a single trait.
Step 4 : Set your price to flip & profit
Phew. Lots of research, done. Buy the undervalued NFTs, done.
The job isn't done. We still have to sell it and secure profits!
Now comes the last step, listing it for sale at the right price. Trying to figure out exaclty what price to sell it at may be a little stressful because obviously you want to make as much money as possible. Let us give you a word of advice.
Don't be greedy! Profits are profits.
Keep in mind that you need to take into consideration the royalty fee taken by the marketplace. On OpenSea it is 2.5%. Also, the creator of the NFT gets a royalty as well. A good rule of thumb is to be ready to give up 10% in total royalty fees.
Use everything to your advantage, use psychological pricing to make it that much more enticing. This means if you plan to sell your NFT for 1 ETH, list it for 0.99 ETH instead.
Looks a little more appealing doesn't it?
Best NFT marketplaces for flipping
While we use OpenSea that's not to say there aren't other platforms where you can flip NFTs. We simply use OpenSea because it is the largest NFT marketplace which means more volume, opportunities, and buyers. Here are some other platforms you can try out
- Rarible
- x2y2
- LooksRare
We recommend using a platform that consistently has high volume, that way you're not stuck holding an NFT without a potential buyer.
Final flippin' thoughts
Flipping Non-fungible tokens might seem like an easy way to make money, and it can be, but remember, if it was that easy EVERYBODY and their grandmas would be doing it.
We'll leave on these 3 thoughts that we hope we engrave in your head, no matter the investment
- Don't invest what you cant afford to lose. Think of it like the money is gone the moment you invest!
- Never ever FOMO. Stay disciplined and trust your research & data
- Always always always do your own research. Just because a famous person posted about it doesnt mean its valuable
Hopefully now you feel confident and ready to try and make some extra money flipping NFTs!
*disclaimer : this is not financial advice. These are tactics and strategies we have personally used to make money flipping NFTs. There is no one method that works 100%*