There are several ways a club can break in new players: either through their farm system, trades or free agency. Something as simple as overpaying a player can set back a team's plan for years.
Every market has a buyer's baseline price for every single player. The trick is to avoid the ones that may provide high-risk and little reward.
For example, this season the San Francisco Giants signed Gregor Blanco and he has blossomed into an everyday left fielder for them in the playoffs. Two years ago, they signed Aubrey Huff and he led them to the World Series. The contract he signed after, ironically, is the exact thing that teams are trying to avoid, as Huff is still playing it out this year despite not providing anything on the field.
This year's crop of free agents aren't as strong as years past but there are plenty of players that hold inflated price tags.