Applying buy-back contract based on a classical newsboy problem to ordinate a two-phased supply chain consisted of a single supplier and a single online retailer. Construct a stackelberg game model and a supply chain integration model, solve a demonstrated example, and discuss two parties how to allocate the supply chain profits and achieve optimum performance of supply chain. The results show that if manufacturer as a leader increases the wholesale price and more subsidized prices, its own profit and gross profit will increase, improving supply chain performance, while online retailer’ profit as a follower will reduce.