How to set up an online store: 11-step guide for 2026

The e-commerce business market potential is massive and growing daily. There’s a whopping 35% of surveyed business owners looking to expand e-commerce in 2025. 

And for good reason: Online business owners traditionally have lower overhead costs than brick-and-mortar store owners. And they have the potential to reach a global audience.

Whether you're a budding entrepreneur or a seasoned business owner, setting up your own online store can open up vast opportunities. Luckily, the process is easier than ever with today’s software and shop platforms. With the right steps, you can reach customers all around the globe and sell online like never before.

Jump to:

• Step 1. Plan your business
• Step 2. Elstablish legal and financial structure
• Step 3.Select the right ecommerce platform
• Step 4. Build your brand identity
• Step 5. Create your online store
• Step 6. Handle product management
• Step 7. Compliance checks
• Step 8. Build the customer experience
• Step 9. Market your online store
• Step 10. Set up shipping and fulfillment
• Step 11. Launch your store and grow
• 4 new challenges facing online store owners
• Start your business with confidence

1. Plan your business

The first step in setting up your online store is getting the right business idea right out of the gate. This isn’t a task to take lightly—what you sell and who you want to sell to will impact every other step after this one. 

Here are some of the key things to consider when you plan your business: 

• Find your passion: If you are starting your business from scratch, think about what you are interested in and what existing problems you and your store can solve. This can be a large, big-picture idea, like clothing, home and garden items, or electronics. 
• Select your niche market: If you are a new or existing business, make sure you identify your niche market or specific area you’ll focus on selling. If you enjoy clothing, for example, what clothing will you focus on? Women’s, men’s, or both? All aspects of clothing, or just a small selection? 
• Identify your target audience: Conduct market research to determine the target demographic that will buy your product. What is their age, gender, online presence, and shopping habits? How will they likely learn of your store?
• Learn key online store terms: It's important to be well-versed in your store’s operations. Keep a glossary of e-commerce and accounting terms on hand to speak confidently with vendors and financial professionals.
• Financial feasibility check: Before you build, validate your idea. Estimate startup costs, including inventory, platform fees, and marketing. Use this data to ensure your business idea will generate profit.

If you're ready to start a business and open an online store, especially an e-commerce business, you need a plan before jumping in feet first.

2. Establish a legal and financial structure

Now that you know what you're selling and who you want to sell to, it's time to do the least fun part of setting up your business: the legal component. This step is crucial for liability protection and tax preparation.

First, you'll need to choose a legal structure. A sole proprietorship is the simplest, while a limited liability company (LLC) offers valuable personal asset protection. These are the two most common selections for small businesses. 

Once your legal structure is in place, the next step is to open separate business bank accounts and credit cards. This prevents mixing personal and business money, which is key for protecting your liability and making bookkeeping simple.

You'll also want to see your profits clearly. A pro-tip here is to integrate your financial tracking with a tool like QuickBooks Online right away. It's an essential tool that connects to your business accounts, automatically importing and categorizing all income and expenses. That means zero manual data entry before you even make your first sale.

Do online stores need to charge sales tax?

While sales tax laws vary by state, online stores generally do need to charge it. Even if your store has no physical presence (like a warehouse or office) in a state, you may still be required to collect sales tax once you hit a certain amount of sales or number of transactions.

Example: You're a small business owner operating Clown Supply Co., and you're located in Texas. You automatically collect sales tax on all orders shipped to customers in Texas. However, the state of New York has an economic nexus threshold of $500,000 in annual sales. 

If your online store sells $500,001 worth of red noses and big shoes to New York customers, you have established nexus and must begin collecting and remitting New York state sales tax on all subsequent orders shipped there—and keep track of this in your accounting software.

3. Select the right e-commerce platform

Once you’ve decided on the basics of your business, you’ll need to select the right e-commerce platform to host your store. Keep in mind that your website will be consumer-facing, allowing customers to interact with your inventory and ultimately make a purchase.

There are many popular platforms in the e-commerce space, each with different specialties and capabilities. You'll want to examine each to find the best fit for your business.

4. Build your brand identity

Once you’ve figured out some of the logistics of starting an online store, the fun part is learning how to build your brand. This step is seemingly simple, but it's an important task that will help distinguish you from your competitors, securing your sales and overall company health. 

When building your brand identity: 

• Create a logo and visual elements that relate to your overall concept. For instance, if you sell floral jewelry, incorporate floral elements and colors into your logo. 
• Develop brand guidelines for your brand's content, including emails, invoices, the website, shipments, and product packaging.
• Craft your brand message so customers know who you are and why you’re unique. 

Design your small business website theme to showcase the best layout possible for your inventory. How will you tag and group items? How will your brand identity run throughout your website?

5. Create your online store

You’ve done the backend legwork—now it’s time to create the online store for your shoppers to see. Understanding how to create a website that is optimized for sales is your next focus. Before they get to see your vast inventory to select from, you’ve got some work to do.

To create your online store, you must: 

• Choose and register your domain name. Your domain name is the website address consumers will use to access your site. It should reflect your business and be simple for consumers to remember. Most companies choose a domain name that matches their business name.
• Design website layout and customize the theme and layout to match your brand guidelines and offerings. 
• Organize product categories so that shoppers can easily navigate between items. 
• Integrate payment gateways like PayPal or Square so consumers can pay you directly. 
• Set up shipping options by establishing clear rates and return timelines. 

Having expert advice when setting up your online store will save you from needing to redo countless hours of work and can position your business to be successful immediately.

How much money do you need to start an online store?

The amount of money you need to create an online store varies significantly depending on your business model. Low-cost options with a dropshipping model require significantly fewer startup funds than a high-cost model. You may need anywhere from $1,000 to $10,000 or more, depending on your model.

6. Handle the product management

You’re almost at the finish line! After you build your website and set the foundation, you’ll now need to handle the tangible project management aspect of running your online business.

For the product management aspect of your business, you’ll need to:

• Set up inventory tracking to provide accurate counts, prevent stockouts (lost sales opportunities), and prevent overselling (leading to frustrated customers and cancellations).
• Create compelling product listings highlighting your product's unique features and benefits, including sizing specifications and dimensions when appropriate. 
• Determine the best pricing strategy for your brand to stay competitive. The most common pricing models include cost-plus, value-based, competitive, penetration, and price skimming.
• Conduct inventory management using QuickBooks Online to track inventory and manage order fulfillment efficiently, ensuring you have just the right amount of inventory. 
• Determine a sourcing model from standard options such as dropshipping, inventory, or print-on-demand. 

7. Compliance checks

Before you hit the launch button on your beautiful new website, you'll want to make sure all your legal ducks are in a row. Ensuring compliance right up front prevents financial and legal complications down the line.

Here are some of the most common areas of error that you'll want to double-check before launching: 

• Shipping rates: Ensure rates are clear, accurate, and displayed upfront. Ambiguous shipping fees can lead to legal disputes or, at the very least, high cart abandonment rates.
• Return policies: Establish a detailed, compliant return and refund policy (including warranties, if applicable). This policy must be prominently posted on your site, as it is often a legal requirement to manage customer expectations.
• Economic Nexus: Your store must collect and remit sales tax in the state where your business is physically located and also in any state where your sales volume or transaction count exceeds its economic nexus threshold. This compliance burden grows with your sales reach.
• Collect and remit correctly: You must ensure that the correct combination of local, county, and state sales tax rates is applied for every single customer's shipping address.

Using integrated accounting software like QuickBooks Online can automate sales tax tracking and collection based on your economic nexus across states.

8. Build the customer experience

Setting up the customer experience is critical when starting an online store. Since you may not get a ton of customer engagement at the beginning of your online business, you have to position yourself to be proactive rather than reactive about what customers favor and need. 

Spend time before launching to build the customer experience by:

• Setting up customer support channels to get questions answered efficiently and quickly, such as email, live chat, and phone. 
• Managing returns and refunds by creating a policy with clear expectations and clearly listing it on the site and in shipments. 
• Optimize the customer experience by offering personalized product recommendations, excellent customer service, and loyalty programs.

Creating a post-purchase experience by providing fast, reliable shipping, personalized communication, and order tracking updates.

9. Market your online store

Since your new store will be online and not at a physical location, you’ll need to put in some work to thoughtfully market it to your target audience. Given their habits, you’ll want to focus on ways to drive customers to your site rather than competitors'. 

To do this effectively while maintaining your small business marketing budget, you can:

• Invest in email marketing by building and segmenting an email list. Then, use email marketing automation to send emails automatically at different times. 
• Consider paid advertising methods like Google Ads, social media advertisements, and retargeting ads. 
• Remember, SEO optimization is your best marketing tool. Optimize every page's titles and descriptions and provide descriptive filenames and alt text for images. 
• Utilize social media by choosing the right platforms to create a business page and sharing high-quality content, like videos, images, and giveaways. Remember to engage with your customers on social media—the more views and clicks you get, the more traffic potential you have. 
• Use AI to fast-track your marketing, from dynamically generating A/B test variations for your ad copy and email subject lines, analyzing customer data to predict optimal send times, or even creating personalized product recommendations directly on your site.

10. Set up shipping and fulfillment 

The finish line for building an online store is close. Now, you need to tidy up the last few important loose ends. You’ll need to set up shipping and fulfillment processes so that customers can place their orders. 

Be sure to do the following to get customers their orders promptly: 

Choose a shipping carrier to fit your customer’s needs. Many carriers offer priority, first-class, and two-day shipping. 

Determine shipping costs to your customer, factoring in things like overall package weight and destination. Many businesses offer free shipping after a certain dollar amount. 

Decide on packaging, choosing appropriate packaging materials, and branding. 

Optimize fulfillment and shipping tasks by streamlining the processes, automating shipping label creation, and investing in the right equipment (like scales and printers) upfront. 

11. Launch your store and grow 

The finish line for building an online store is close. Now, you need to tidy up the last few important loose ends. You’ll need to set up shipping and fulfillment processes so that customers can place their orders. 

Be sure to do the following to get customers their orders promptly: 

• Choose a shipping carrier to fit your customer’s needs. Many carriers offer priority, first-class, and two-day shipping. 
• Determine shipping costs to your customer, factoring in things like overall package weight and destination. Many businesses offer free shipping after a certain dollar amount. 
• Decide on packaging, choosing appropriate packaging materials, and branding. 
• Optimize fulfillment and shipping tasksby streamlining the processes, automating shipping label creation, and investing in the right equipment (like scales and printers) upfront.

Common challenges facing online store owners

So, you've worked through the eleven steps above on how to start an online business—whew, good job—and you're still experiencing issues with your online business. Navigating them successfully is part of growing your new operation.

Start your business with confidence 

The world of e-commerce has grown extensively and continues to evolve. Opening an online store will help you stay relevant in a fast-paced world, allowing customers from all over to reach you. 

QuickBooks E-Commerce helps speed up backend operations with bookkeeping automation and financial planning tools, keeping you on track for success.