2021 proved beyond doubt that brands can no longer ignore non-fungible tokens (NFTs).

From Pizza Hut to Taco Bell, Pringles and Visa, Gucci and Nike, enterprises began to experiment with different NFT business models.

Small businesses and independent artists were not to be outdone either. 18-year-old digital artist Victor L (Twitter handle @fewocious) sold two NFTs in a space of 24 hours, netting $250,000 for the piece “Afraid to Be Myself”.

But before we get ahead of ourselves, here’s what you need to know about NFTs before going further.

Non-Fungible Tokens Demystified

Non-fungible tokens are simply digital assets hosted on a blockchain. The original NFTs were minted on the Ethereum blockchain and buyers paid in ether. Today, NFTs can be purchased using a multitude of cryptocurrencies.

Regarding fungibility, ‘fungible’ means that an asset can be traded for another of similar value. So, for example, you can exchange a US$100 bill for two US$50 bills.

With NFTs however, they are ‘non-fungible’ hence you can’t trade one for another because each NFT is unique. And it’s this rarity that leads to them commanding a high price when they are presented as artworks or collectibles.

Now, here’s how small businesses can use NFTs in their own operations.

3 Ways Small Businesses Can Use NFTs

There are numerous ways in which small businesses can tap into the power of NFTs, we present three of these strategies.

1. Sell NFTs for avatars in virtual worlds

The increasing popularity of the metaverse, virtual worlds, and avatars has opened a door of opportunity for brands that want to upsell imitations of their real-world products in a virtual setting.

The concept of tokens-as-virtual-products has been pioneered by brands such as Coca-Cola and Nike. Already the shoemaker has filed patents for its NFTs, CryptoKicks, and exclusive rights to produce and sell virtual sneakers in various virtual worlds.

Coca-Cola also made headlines by auctioning off a collection of NFTs including the famous wearable the Coca-Cola Bubble Jacket.

By looking at your own physical products as a small business owner, you can choose the ones you would like to mint an NFT for, and then sell these tokens in marketplaces such as OpenSea and SuperRare.

2. Improve procurement and supply chain management

For small businesses, trying to win and maintain the trust of buyers is pivotal. With that in mind, NFT tags are an excellent way of helping you do just this.

Because supply chains are vulnerable to attack, the introduction of defective, and even counterfeit products, NFT tags can serve to authenticate and verify commodity integrity upon delivery.

The NFT tag attached to your physical product is scanned along the supply chain to monitor its progression and movement. If the product is delivered and it does not match the metadata, small business owners can track where goods were tampered with and thus plug leaks in the supply chain.

3. Raise brand profiles with limited-edition collectibles

Releasing exclusive merch and collectibles has always been a favorite marketing tactic employed by major brands.

You see it with high-end retailers such as Hermès in the production of their bestselling Kelly and Birkin Bags. Today, smaller businesses can make use of the same strategy using NFTs instead.

A company from which you can draw inspiration, that has done this successfully using NFTs is  Taco Bell. In 2021, they issued a limited collection of NFTacoBells GIFs which sold out in a matter of minutes.

Wrap Up

As you can see, the possibilities of NFTs in business are limitless. 

Armed with a well-planned NFTs marketing strategy can assist your small business to improve its profile, develop creative experiences for clients, and boost brand recognition.