Configure price quote (CPQ) software automates the three stages of selling configurable products: selecting valid options, calculating accurate pricing, and generating professional quotes. For product companies doing $2M to $20M in revenue, the CPQ decision usually comes down to one question: do you buy an enterprise platform that was designed for 500-person sales teams, or do you build something purpose-fit for how your business actually sells?
This guide covers what CPQ is, how the major platforms compare, where enterprise tools fail mid-market companies, and how to decide whether building custom makes more sense for your business.
What CPQ Means and How It Works
CPQ stands for Configure, Price, Quote. Each word represents a distinct phase in the process of turning a buyer’s interest into a structured offer.
Configure is the first step. The buyer (or a sales rep on their behalf) selects product options, features, dimensions, materials, or any other variable that affects what gets built or shipped. A good configuration layer enforces rules: if you pick option A, option B is required but option C becomes unavailable. This prevents impossible combinations from ever reaching the quoting stage.
Price is where the configured product gets a dollar amount. This sounds simple, but for most product companies it involves layered logic: base pricing, volume discounts, customer-specific pricing tiers, material surcharges, shipping calculations, and margin rules. The pricing engine takes the valid configuration and applies all relevant pricing rules to produce an accurate total.
Quote is the output. A formatted document (PDF, email, or web page) that presents the configured product, pricing breakdown, terms, and a path to acceptance. Good quotes include visuals of the configured product, itemized costs, and clear next steps.
Why These Three Steps Matter
The reason CPQ exists as a category is that most product companies handle these three steps across disconnected systems. Configuration rules live in someone’s head or a shared spreadsheet. Pricing logic lives in an ERP or another spreadsheet. Quotes get assembled manually in Word or Excel. Every handoff between steps introduces errors, delays, and lost deals.
A manufacturer we worked with was losing an average of 3.2 days between initial inquiry and quote delivery. Their sales team spent roughly 40% of their time assembling quotes manually rather than selling. Their error rate on quotes (wrong pricing, invalid configurations, missing components) was running at 12%. That is not unusual for companies selling configurable products without CPQ.
The CPQ Lifecycle in Practice
Here is how the three stages play out in a real transaction:
- A buyer visits your website or contacts your sales team with a need.
- The configuration step captures what they want: product type, dimensions, material, finish, quantity, delivery timeline.
- Validation rules check that every selection is compatible. Invalid combinations are blocked or flagged before pricing.
- The pricing engine applies base cost, volume breaks, customer-tier discounts, surcharges, and any promotional pricing.
- An approval workflow triggers if the total discount exceeds preset thresholds or if the margin falls below a floor.
- The quote document is generated with all configuration details, pricing, terms, and an acceptance mechanism.
- The buyer reviews, negotiates (if applicable), and accepts. The accepted quote feeds into order management and fulfillment.
When this lifecycle runs well, it compresses days into minutes. When it runs poorly, it loses deals to competitors who quote faster.
Major CPQ Platforms Compared
The CPQ market is dominated by enterprise platforms designed for large sales organizations. Here is how the major players stack up, with honest assessments of where each one fits and where it does not.
Salesforce CPQ (Revenue Cloud)
Salesforce CPQ is the market leader by install base. It lives inside the Salesforce ecosystem, which means if your CRM is already Salesforce, the integration story is strong. Configuration rules, pricing logic, and quote templates all live inside the platform you already use for customer management.
Strengths: Deep Salesforce integration, large partner ecosystem, mature approval workflows, strong reporting. If your entire revenue operation runs on Salesforce, this is the natural choice.
Weaknesses: Expensive ($75+ per user per month for CPQ alone, on top of Salesforce licensing). Implementation costs routinely hit $100,000 to $500,000+. The platform is powerful but complex, and mid-market companies often use 20% of its capabilities while paying for 100%. Customization requires specialized Salesforce developers.
Best for: Companies with 20+ sales reps, already running Salesforce, selling products with moderate configuration complexity.
Oracle CPQ (formerly BigMachines)
Oracle CPQ is the heavyweight for complex manufacturing and industrial products. It handles deep configuration trees, multi-level BOMs (bills of materials), and engineering-driven pricing better than most alternatives.
Strengths: Handles extreme product complexity. Strong manufacturing and engineering integration. Good for companies where a single product might have thousands of possible configurations.
Weaknesses: Expensive and slow to implement. The user interface feels dated compared to modern tools. Requires significant IT resources to maintain. Oracle’s licensing model can be opaque.
Best for: Large manufacturers with engineering-driven products and dedicated IT teams.
SAP CPQ
SAP CPQ fits companies already invested in the SAP ecosystem (SAP ERP, SAP Commerce Cloud). It connects configuration and pricing directly to SAP’s back-end systems, which eliminates a lot of integration work.
Strengths: Native SAP integration, strong for companies with complex ERP requirements, handles international pricing and multi-currency well.
Weaknesses: SAP-centric. If you are not already an SAP shop, the overhead of adopting this tool is enormous. Implementation timelines of 6 to 12+ months are common.
Best for: Companies already running SAP ERP that need CPQ connected to their existing systems.
DealHub CPQ
DealHub is a newer entrant positioned for mid-market companies. It combines CPQ with contract management and subscription billing in a single platform.
Strengths: More modern interface than legacy platforms. Faster implementation (weeks, not months). Good for companies selling a mix of products and subscriptions. Integrates with Salesforce, HubSpot, and Microsoft Dynamics.
Weaknesses: Less depth in complex manufacturing configuration. Not as mature for companies with deep BOM structures or engineering-driven products. Still relatively new in the market.
Best for: Mid-market companies selling a mix of product types that want a modern tool without enterprise complexity.
PandaDoc CPQ
PandaDoc started as a document automation platform and added CPQ features. It is the most accessible option for small teams.
Strengths: Easy to set up. Good document generation. Reasonable pricing (starts around $49/user/month). Built-in e-signatures.
Weaknesses: Limited configuration depth. Pricing rules are basic compared to dedicated CPQ platforms. Not suitable for complex manufactured products with deep dependency trees.
Best for: Companies with relatively simple product configurations that need professional quotes and e-signatures more than complex configuration logic.
The Mid-Market Gap
Here is the problem the CPQ market does not talk about: there is a significant gap between PandaDoc-level simplicity and Salesforce-level enterprise capability. If your product is genuinely complex (custom dimensions, material dependencies, manufacturing constraints, volume-based pricing tiers) but your company has 5 to 15 people involved in quoting rather than 50 to 500, none of these platforms fit cleanly.
Enterprise CPQ platforms are over-engineered and overpriced for your needs. Simple tools lack the configuration depth your products require. This is exactly where custom CPQ starts making sense.
Enterprise CPQ vs. Mid-Market Reality
Enterprise CPQ platforms were built for a specific type of company: large organizations with dedicated sales operations teams, IT departments, and budgets for multi-year implementation projects. When a $500M manufacturer deploys Salesforce CPQ, they have the resources to staff a project team, hire a Salesforce consulting partner, and absorb a 12-month implementation timeline.
Product companies doing $2M to $20M do not operate that way. Here is where the mismatch shows up.
Implementation Timelines Are Too Long
Enterprise CPQ implementations routinely take 6 to 12 months. For a mid-market company, that means half a year (or more) of paying licensing fees before the system generates its first quote. During that time, you are still running the manual process. You are paying for two systems and getting the full benefit of neither.
Per-User Licensing Does Not Scale Down
Salesforce CPQ at $75 per user per month sounds manageable until you add the base Salesforce license ($150+/user/month), the implementation partner fees, and the ongoing administration costs. For a company with 10 users, the annual licensing alone can exceed $27,000 before you have configured a single product rule. Add implementation costs of $100,000+, and the three-year total cost of ownership can exceed $200,000 for a tool that automates one slice of your operations.
Configuration Depth Does Not Match
Many enterprise CPQ platforms are built for companies selling products with a moderate number of options (think: software packages with feature tiers, or manufactured goods with 10 to 50 configuration variables). But product companies often have configuration complexity that is both deeper and more specific than what standard rules engines handle well.
A custom metal fabricator, for example, might have configuration logic that depends on material thickness, welding requirements, finish types, dimensional constraints, and structural engineering calculations. These are not simple “if X then Y” rules. They are calculations that involve physics, material science, and manufacturing process constraints. Forcing this logic into a generic CPQ rules engine often requires as much custom development as building from scratch.
Your Sales Process Is Different
Enterprise CPQ assumes a traditional sales process: sales rep receives inquiry, sales rep configures product in CPQ, sales rep sends quote, buyer accepts. But many product companies are moving toward self-service configuration, where the buyer configures the product on the website and the system generates the quote automatically.
Enterprise CPQ platforms were not designed for this. Embedding Salesforce CPQ into a public-facing website is technically possible but architecturally awkward and expensive. It is building a customer-facing experience on top of a tool designed for internal sales teams.
When to Build Custom CPQ
Custom CPQ is not always the right answer. Building from scratch means you own the code, the maintenance, and the roadmap. That is a responsibility. But for certain companies, it is clearly the better path.
The Decision Framework
Consider building custom CPQ when three or more of these conditions are true:
Your configuration logic involves calculations, not just rules. If pricing a product requires mathematical formulas (area calculations, weight-based pricing, structural load calculations), custom logic is often simpler to build and maintain than forcing those formulas into a generic rules engine.
You want buyer-facing configuration. If your goal is a product configurator on your website where customers self-serve, custom gives you full control over the user experience. You build the frontend your buyers actually want, not the interface a CPQ vendor designed for internal sales teams.
Your team is small. If fewer than 15 people will use the quoting system, per-user licensing costs for enterprise CPQ may exceed the cost of building and maintaining a custom system within two to three years.
Integration with your existing stack matters. If you are already running a specific ecommerce platform, ERP, or CRM, a custom CPQ can be built to integrate natively rather than through middleware adapters.
Your pricing model is non-standard. Tiered volume pricing, customer-specific pricing, time-based pricing, material market-rate pricing, or any combination of these. If your pricing logic makes Salesforce consultants wince, custom is usually cheaper to build and easier to maintain.
What a Custom CPQ Looks Like
Custom CPQ for a mid-market product company is not a monolithic platform. It is typically a set of connected components:
- A product configurator (web-based, customer-facing or internal) that captures product specifications and validates selections against your rules.
- A pricing engine (server-side logic) that takes the validated configuration and calculates pricing based on your specific rules, discounts, and surcharges.
- A quote generator that produces formatted output (PDF, email, or web-based) with all configuration details, pricing, and terms.
- An approval workflow (optional) for quotes that exceed discount thresholds or fall below margin floors.
- Integrations with your CRM (for deal tracking), ERP (for order fulfillment), and email (for delivery).
Each component can be built incrementally. Start with configuration and pricing. Add quote generation. Layer on approvals and integrations as the system matures. This is the approach we typically recommend to our operations partners.
Implementation Considerations
Whether you buy enterprise CPQ or build custom, the implementation work is similar. The software is the easy part. The hard part is modeling your products, pricing, and processes correctly.
Product Data Modeling
Before any CPQ system can work, you need a structured model of your product catalog. This means defining:
- Product families and categories. How products are grouped and how those groups affect available options.
- Configuration attributes. Every variable a buyer can select (size, material, color, quantity, features).
- Dependency rules. Which options require, exclude, or modify other options.
- Validation constraints. Minimum and maximum values, dimensional limits, material compatibility.
- SKU generation logic. How configured products map to orderable items in your fulfillment system.
For companies with deep product catalogs, this modeling exercise alone can take 4 to 8 weeks. It is the foundation everything else depends on, and shortcuts here create problems that compound downstream.
Pricing Rules Architecture
Pricing logic in product companies is almost never simple. A typical mid-market product company has multiple pricing layers:
- Base pricing per product or product family
- Material/component surcharges that fluctuate with market prices
- Volume discounts with tiered break points
- Customer-tier pricing (retail, wholesale, dealer, preferred)
- Geographic adjustments for shipping and regional pricing
- Promotional pricing that overrides standard rules for specific time periods
- Margin floors that prevent quotes below a minimum profitability threshold
Each layer interacts with the others, and the order of operations matters. A 10% volume discount applied before a 15% customer-tier discount produces a different result than the reverse. Documenting this logic precisely is critical before any implementation begins.
Approval Workflows
Most product companies need at least a basic approval process for quotes that deviate from standard pricing. Common triggers include:
- Discount exceeds a threshold (e.g., more than 20% off list price)
- Total quote value exceeds a limit (e.g., over $50,000 requires manager approval)
- Margin falls below a floor (e.g., less than 25% gross margin)
- Non-standard terms or conditions are included
The workflow can be as simple as an email notification to a manager or as structured as a multi-level approval chain. Start simple. You can always add complexity later.
CRM and ERP Integration
CPQ does not exist in isolation. The configuration and pricing data needs to flow to other systems:
- CRM integration pushes quote details into your deal pipeline. Sales teams should see the quoted amount, configuration, and status without leaving their CRM.
- ERP integration passes accepted quotes into order management. The configuration data feeds the bill of materials, production scheduling, and inventory allocation.
- Email integration enables automated quote delivery and follow-up sequences.
The integration layer is where many CPQ implementations stall. Building clean data handoffs between configuration, pricing, CRM, and ERP is the most technically demanding part of any CPQ project. It is also where the most time savings come from once it is working.
For a deeper look at how these systems connect end-to-end, read our guide on automating the quote-to-cash cycle.
Cost Comparison: Enterprise vs. Custom Build
The total cost of ownership over three years tells the real story. Here is a realistic comparison for a product company with 10 quoting users.
Enterprise CPQ (Salesforce CPQ Example)
| Cost Category | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|---|---|---|---|
| Salesforce CRM licenses (10 users) | $18,000 | $18,000 | $18,000 | $54,000 |
| CPQ add-on licenses (10 users) | $9,000 | $9,000 | $9,000 | $27,000 |
| Implementation partner | $120,000 | $0 | $0 | $120,000 |
| Customization and integration | $30,000 | $15,000 | $15,000 | $60,000 |
| Training | $5,000 | $2,000 | $2,000 | $9,000 |
| Ongoing administration | $12,000 | $12,000 | $12,000 | $36,000 |
| Total | $194,000 | $56,000 | $56,000 | $306,000 |
Custom CPQ Build
| Cost Category | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|---|---|---|---|
| Discovery and product modeling | $15,000 | $0 | $0 | $15,000 |
| Configuration engine development | $25,000 | $0 | $0 | $25,000 |
| Pricing engine development | $15,000 | $0 | $0 | $15,000 |
| Quote generation and delivery | $10,000 | $0 | $0 | $10,000 |
| CRM/ERP integration | $15,000 | $5,000 | $5,000 | $25,000 |
| Hosting and infrastructure | $2,400 | $2,400 | $2,400 | $7,200 |
| Maintenance and enhancements | $0 | $18,000 | $18,000 | $36,000 |
| Total | $82,400 | $25,400 | $25,400 | $133,200 |
The custom build costs roughly 43% of the enterprise option over three years. And the custom system is built specifically for your products, your pricing logic, and your buyer experience. You own the code and the roadmap.
These numbers are directional. Your actual costs depend on product complexity, integration requirements, and whether you build in-house or work with a partner. But the pattern holds: for mid-market product companies, custom CPQ typically delivers better ROI than enterprise platforms.
The Hidden Cost Advantage
Beyond raw dollars, custom CPQ saves money in ways that do not show up in a line-item comparison:
- Faster time to value. A custom CPQ built incrementally can start generating quotes within 6 to 8 weeks. Enterprise implementations typically take 6 to 12 months.
- No shelfware. You only build what you need. Enterprise platforms ship with hundreds of features your team will never touch but still pays for.
- Lower training burden. A purpose-built interface designed around your specific workflow is faster to learn than a general-purpose platform with a learning curve measured in weeks.
- No vendor lock-in. You own the system. If your needs change, you change the system. You do not negotiate a new contract or migrate to a different vendor.
Choosing the Right Path
The CPQ decision is ultimately a question of fit. Enterprise platforms are powerful, proven, and well-supported. Custom builds are focused, cost-effective, and flexible. Neither is inherently better. The right choice depends on your products, your team, your budget, and how you sell.
If you are a product company in the $2M to $20M range selling configurable products, start by mapping your actual requirements. How complex is your configuration logic? How many people need to generate quotes? What systems does the CPQ need to connect to? What is your budget, not just for software, but for the full implementation including consulting, training, and ongoing support?
The answers to those questions will point you toward the right approach. If you need help evaluating the options or building a CPQ system that fits your business, our operations team works with product companies on exactly this kind of infrastructure. We also work on the performance and frontend layer that makes buyer-facing configurators fast and intuitive.
For a broader view of how CPQ fits into the full order lifecycle, read our guide on automating the quote-to-cash cycle.