CPQ (configure, price, quote) is software that lets a seller or a buyer choose a valid combination of options, computes the price from the company’s rules, and produces a quote. In manufacturing it began with configurable products built from a catalogue, and now also covers made-to-print parts priced from a CAD file. It is not an ERP: it prices and quotes, while the ERP plans, makes, costs and invoices the job.
Key points
- Configure means only valid combinations can be chosen; price means rules, not guesswork; quote means a document the buyer can accept.
- Generic CPQ assumes a product catalogue. A made-to-print part has no catalogue entry, so its cost must come from geometry.
- ERP quoting is built for estimators inside the system that runs the job; CPQ is built for speed at the point of sale.
- The two usually run together: CPQ produces the price and the order, the ERP takes it from there.
- CPQ does not fix a pricing problem. It applies your rules faster, including the wrong ones.
What does CPQ do?
Configure. The buyer or salesperson picks options: model, size, material, finish, accessories, quantity, lead time. Rules stop invalid combinations: this finish is not available in that material, this size needs that motor. The result is a configuration the factory can make.
Price. Rules turn the configuration into a price: base prices, option prices, formulas, quantity discounts, customer price lists, approvals for discounts beyond a limit.
Quote. The system produces a quote document with the configuration, the price, the terms and the validity, and often turns an accepted quote into an order.
What kinds of manufacturer use CPQ?
| Business model | What is configured | Where the price comes from |
|---|---|---|
| Configure-to-order (machines, furniture, pumps) | Options from a catalogue of modules | Price lists and option rules |
| Engineer-to-order (special machines, plant) | A proposal with engineering content | Estimates and rules, with heavy review |
| Made-to-print (job shops, bureaus) | The buyer’s own part, plus material, finish, quantity | The part’s geometry, the shop’s rates and rules |
Classic CPQ software grew up in the first row. The third row is different: the buyer brings the product, so there is no catalogue to configure from. Before any rule can price the part, something has to measure it.
Worked example: how a CPQ rule set prices one configuration
The arithmetic inside a CPQ is the same arithmetic an estimator does, written once as rules. An example configuration of a machined part, with illustrative rates:
Worked example: rules applied to one configuration, 10 parts (example figures)
| Line | Rule | Amount |
|---|---|---|
| Machine time | 1.6 h per part × €45/h | €72.00 per part |
| Material | 0.8 kg per part × €12/kg | €9.60 per part |
| Bead-blast finish | option price per part | €8.00 per part |
| Per-part cost | €72.00 + €9.60 + €8.00 | €89.60 |
| Batch | €89.60 × 10 | €896.00 |
| Set-up | per batch | €60.00 |
| Total cost | €956.00 | |
| Price at 30% margin | €956.00 ÷ 0.70 | €1,365.71 |
| Unit price | €1,365.71 ÷ 10 | €136.57 |
In a generic CPQ, the 1.6 hours and the 0.8 kg have to come from somewhere: a person reading the drawing and typing them in, or a lookup table keyed by part number. For catalogue products that is fine; the numbers are known in advance. For a part the shop has never seen, those two numbers are the estimate. That is the gap geometry-driven quoting fills: it measures the part, derives time and material from the shop’s machines, and then applies the same rules.
What CPQ is not
Not an ERP. It does not plan capacity, issue works orders, track stock, record job costs or invoice. It hands those to the ERP and the MES.
Not a pricing strategy. CPQ applies the rules it is given. If your margin is applied wrongly or your overhead is spread unfairly, a CPQ will reproduce the error on every quote, quickly. Margin vs markup covers the most common rule mistake.
Not a CAD tool. Configuring a product from options is not designing it. Engineer-to-order work still needs engineers.
Not a CRM. It may connect to one, but it does not manage the pipeline, the contacts or the follow-up.
CPQ compared with ERP quoting
| ERP quoting or estimating | Generic CPQ | Geometry-driven CPQ (instant quoting) | |
|---|---|---|---|
| Main user | Estimator | Salesperson, sometimes buyer | Buyer, with estimator for exceptions |
| Input | Routings, BOMs, cost centres | Catalogue options | CAD file plus options |
| Speed per quote | Minutes to hours | Seconds to minutes | Seconds |
| Handles new, unseen parts | Yes, by estimator | Only with manual measurements | Yes, from the file |
| Linked to job costing | Directly | Through integration | Through integration |
| Buyer-facing | Rarely | Sometimes | Yes |
ERP estimating is strongest where the quote must reflect the exact routing the shop will use and feed the job cost directly. CPQ is strongest where speed and consistency at the point of sale matter more. Most companies that use both let CPQ produce the price and the order, then pass the order to the ERP to plan and make. ERP, MES and quoting covers how the three systems divide the work.
Rules that matter in a manufacturing CPQ
Generic CPQ rules are about compatibility and discounts. A manufacturing CPQ needs a few more:
- Manufacturability rules. A part too large for the machine, a wall too thin for the process, a feature the route cannot make. These should stop or flag the quote, not just change the price.
- Floors. A minimum price per part and a minimum order value, applied after every discount so that no combination of options can undercut them.
- Quantity logic. Set-up spread over the batch, not a flat percentage off a list price.
- Lead-time options with their own price effects and working-day calendars.
- Review triggers. Conditions that hold the quote for a person instead of pricing it automatically.
How CPQ fits into the order flow
- The buyer, or a salesperson on their behalf, configures and prices the part.
- The CPQ checks the rules and either shows a price or routes the request for review.
- The buyer accepts the quote and places the order.
- The order, with its configuration and price lines, passes to the ERP, which plans and makes it.
- Actual costs from the job flow back, so the rates in the CPQ can be checked against reality.
The last step is the one most often missing, and the one that keeps the prices honest.
Is CPQ right for your shop?
It tends to pay when:
- quote volume outgrows the estimators, and buyers wait;
- many requests are routine parts the shop makes every week;
- people who are not estimators need to quote consistently;
- buyers expect to configure and price online, as marketplaces have taught them to.
It is a poor fit when most work is one-off, engineer-to-order or dominated by drawing requirements a rule cannot capture. Those jobs belong with an estimator and the RFQ process, though a CPQ can still handle the routine share of requests around them.
What to look for
| Question | Why it matters |
|---|---|
| Does it price from my own rates, machines and materials? | A generic price list is not your cost |
| Can it read a CAD file, or does someone type the measurements? | Decides whether it handles made-to-print parts |
| Does every price come with a price breakdown? | You cannot fix a price you cannot see into |
| Can I test a rule change before it goes live? | A wrong rate repeats on every quote |
| Can it route edge cases to a person? | Not every request should get an automatic price |
| How do orders reach my ERP? | Webhook, API or file; avoid re-keying |
What instant quoting is goes deeper on the geometry-driven kind.
Quotometry is a geometry-driven CPQ for manufacturing services: it analyses a part once, re-prices every option from that analysis with the shop’s own rates and rules, versions the configuration with a simulator to backtest changes, and passes orders on by signed webhook and e-mail, with a REST API for other systems, as described on the product page.
Questions people ask
What does CPQ stand for?
Configure, price, quote. CPQ software lets a seller or a buyer choose a valid combination of options, computes the price from rules, and produces a quote document. In manufacturing it is used for configurable products, such as machines built from a catalogue of modules, and increasingly for made-to-print parts priced from their geometry.
Is CPQ the same as an ERP quoting module?
No. An ERP quoting or estimating module builds a quote from routings, bills of materials and cost centres inside the system that will run the job, and is used by estimators. CPQ sits in front of sales: it enforces valid configurations, applies pricing rules and produces quotes quickly, often for people who are not estimators. Many companies run both and connect them.
Can generic CPQ software quote custom machined or printed parts?
Only partly. Generic CPQ is built around a catalogue of products and options, and a made-to-print part is not in any catalogue: its cost depends on geometry the CPQ cannot read. It can apply rules once someone has entered the measurements. Quoting custom parts directly from a CAD file needs geometry analysis, which is what manufacturing-specific instant quoting adds.
Do I need CPQ if I have an ERP?
Not necessarily. If your estimators keep up with demand and quotes go out fast enough, ERP estimating may be enough. CPQ earns its place when quote volume outgrows the estimators, when non-estimators need to quote, or when buyers expect to configure and price online. In that case CPQ prices and the ERP still plans, makes and invoices.
Quotometry prices every part from your own machines and rates, on your website, in seconds.