Overprice

To set an unrealistically high price on something; to charge more for a product or service than its actual value or what the market will bear. This often stems from inflated production costs, a desire for excessive profit margins, a lack of competitive pricing, or a misunderstanding of customer willingness to pay. It can lead to decreased sales, reputational damage, and ultimately, reduced profitability. Careful market analysis and cost-benefit analysis are crucial to avoid the pitfalls of overpricing. Overpricing can also reflect artificial scarcity or brand prestige.

Overprice meaning with examples

• The art gallery was accused of severely overpricing the paintings, considering their historical significance was minimal and the artist relatively unknown. Despite the hype surrounding the exhibition, the high prices deterred potential buyers, leaving many canvases unsold and damaging the gallery’s reputation. They failed to accurately assess the market's interest and were forced to drastically discount the remaining pieces to avoid further losses.
• The new luxury car model was significantly overpriced compared to its competitors, offering only marginal improvements. While the brand enjoyed a premium image, the car's features didn't justify the exorbitant price tag. Consumer reports highlighted this discrepancy, and sales figures suffered. Ultimately, the company had to consider offering rebates and incentives to clear the excess inventory, demonstrating a clear miscalculation in pricing strategy.
• The hotel chain was criticized for overpricing its rooms during a major sporting event, taking advantage of the increased demand. Guests felt exploited by the inflated rates, creating negative online reviews. This short-term profit maximization backfired as the backlash damaged the hotel's long-term brand image and future occupancy rates declined. The situation forced the company to re-evaluate its dynamic pricing model.
• The software company was accused of overpricing its annual subscription, especially considering the limited features available compared to rival products. Potential customers abandoned their purchase when they compared costs with comparable options. Many users opted to utilize open source applications for their software, leading to stagnation in sales figures for that year.
• The retailer was known to sometimes overprice merchandise, particularly during periods of limited supply. The store managers often justified the inflated costs as a result of 'shipping issues'. Customers quickly became frustrated with the retailer, frequently complaining on review forums of being overcharged, and chose instead to shop at competing chains, who were often able to offer a better deal.