According to Michael Porter¡¦s Competitive Advantage, only through Value Chain Analysis, a company can realize it¡¦s cost behavior and the resources needed for differentiation. Thus the company can optimize its resources usage and increase it¡¦s business activities¡¦ performance. With the Internet environment, economic value for a company is nothing more than the gap between price and cost, and it is reliably measured only by sustained profitability. In e-retailing, e-retailers that want to reach competitive advantage and high economic value must consider how to create real margins, how to measure and manage the cost of e-retailing activities, and execute it in a efficient way to enhance e-retailer¡¦s competitive advantage. This research applies Activity-Based Costing approach to confer e-retailing activities. Value chain analysis is first employed to explore the primary activities of e-retailing. Then the improvement of cost and process are sought from activity analysis, resource cost driver and process cost driver. Finally, the critical e-retailing activities result from the internal value chain analysis. The research results indicated that the price of product and the characteristic of product have different influence on e-retailing activities. In addition, e-retailer want sustained profitability, the finite resource must provide for the customer and product that contribute to e-retailer¡¦s sustained profitability. Finally, the research also indicated that the link of marketing/sales activities and customer service activities are the most critical e-retailing activities. Keyword¡Gvalue chain, e-retailing activities, Activity Based Costing