CPQ Fundamentals
- Watch Short Explainer Video
The Odoo CPQ Workflow Lifecycle
Defining Components
Defining the Configurable Product
Cross-Component Compatibility Rules
Pricing Configuration for Configurable Products
Quote Generation
Manufacturing, Procurement, and Delivery
End-User Portal Configuration
Conclusion

Businesses selling configurable products, whether modular furniture, industrial equipment, machinery, or custom-built solutions can no longer rely on spreadsheets, manual calculations, and disconnected approval cycles.

Traditional quoting methods slow sales teams down, increase configuration errors, and create gaps between sales, engineering, and operations.

This is where CPQ (Configure, Price, Quote) becomes essential.

This CPQ Guide 101 serves as a complete CPQ user guide and CPQ tutorial for businesses using Odoo.

It explains how CPQ automates product configuration, pricing logic, and quotation generation while seamlessly connecting sales with manufacturing, procurement, and delivery through Odoo ERP.

1. Odoo CPQ Fundamentals

CPQ stands for Configure → Price → Quote, the foundation of modern quoting systems.

Configure

Sales teams or end users select product components, options, and variants.
CPQ ensures:

Mandatory components are always included
Invalid or incompatible combinations are prevented
Engineering and production constraints are respected

Price

CPQ calculates pricing automatically using:

Regular price calculation
Dynamic price calculation
Customer- or region-specific pricelists

Quote

CPQ generates:

Automatic & Accurate quotes for internal sales teams
Automatic Quotes or RFQs for end users through a website or portal

Watch Short Explainer Video>>

2. The Odoo CPQ Workflow Lifecycle

A complete Odoo CPQ workflow follows a structured lifecycle:

Define components of the configurable product
Define the configurable product and identify mandatory vs optional components
Define compatibility rules between components
Define sales price and cost price logic
Generate the quotation
Confirm the quote to trigger:
- Manufacturing Order (MO), or
- Purchase Order (PO), based on routing rules

This end-to-end automation ensures a smooth quote-to-order process.

3. Defining Components

In Odoo CPQ, components are created exactly like standard Odoo products.

Example: Gaming Chair Components

Chair Frame
Chair Seat
Chair Backrest
Chair Armrest
Chair Legs
Chair Wheels
Chair Headrest

Note: There is no special process to create CPQ components. They are standard goods in Odoo.

To enable configuration, components may have variants where required.

Example:
Chair Frame → Attribute: Frame Type

Economical
Premium

Not every component needs variants, only those requiring configuration flexibility.

4. Defining the Configurable Product

Once components are ready, the configurator defines a configurable product.

To differentiate it from a normal product:

Enable the “Configure” option on the product form

CPQ User Guide 101- Components

Next, define:

Mandatory components
Optional components
Default component variants

CPQ User Guide 101- Component Definition

This structure ensures consistency during configuration by sales teams or end users.

5. Cross-Component Compatibility Rules

Compatibility rules control valid component combinations, preventing incorrect or non-manufacturable configurations.

CPQ User Guide 101- Cross-component compatibility

Example

If:

Chair Frame Type = Premium
Then:
Hide Economical Seat Quality

These rules:

Reduce sales errors
Eliminate engineering rework
Ensure only valid configurations are sold

CPQ User Guide 101- Cross-component compatibility

6. Pricing Configuration for Configurable Products

Odoo CPQ supports two pricing dimensions:

Sales Price

Used for quotations.

Pricing methods:

Regular Price – Sum of selected component prices
Fixed Price – Base product price + optional component prices

Cost Price

Used to calculate actual manufacturing cost.

Cost methods:

Regular Cost – Fixed cost of the product
Dynamic Cost – Sum of selected component costs

Cost calculations can also include:

Labor cost
Operational cost
Shipping and overheads

Odoo CPQ also supports pricelists based on:

Region
Currency
Customer segment
Promotions and special offers

7. Quote Generation

Quoting is where CPQ delivers the most value.

Here Sales team has to first configure the product and then mention the Customer details. Once Customer details and configuration is saved Quote is generated then Sales representative has to confirm the Quote from sales app to convert it as Sales order.

Depending on the routes set on the configurable products and its components, on confirming the Quote odoo generates the Manufacturing Order or Purchase Order and Delivery Order.

Once the Configuration is saved at time of saving the quote Odoo CPQ generate BOM for the configurable product. Once quote is conformed the that BOM is used in Manufacturing order to process it further.

8. Manufacturing, Procurement, and Delivery

Manufacturing Order (MO)

Enable Manufacture + Replenish on Order (MTO)
Confirmed quote creates MO automatically
Operations (assembly, finishing, etc.) can be dynamically included

Purchase Order (PO)

Components routed as Purchase
PO is generated upon quote confirmation
Procurement precedes manufacturing

Delivery Order

Auto-generated on confirmation
Triggered post-manufacturing and quality checks

This ensures full traceability from configuration to delivery.

9. End-User Portal Configuration

Odoo CPQ allows portal or website users to configure products directly.

Businesses can choose whether users:

Request a Quote (RFQ)
Receive a priced quotation
Proceed directly to checkout and payment

This capability makes CPQ ideal for B2B eCommerce and distributor-driven sales models.

Explore Odoo CPQ- Ecommerce Edition>>

Conclusion

CPQ is no longer optional, it is a critical system for businesses selling configurable products at scale. This CPQ Guide 101 demonstrates how CPQ, when integrated with Odoo ERP, creates a fully automated, accurate, and scalable quote-to-order process.

Businesses adopting CPQ benefit from: