Good ideas!
There's a Samko and Miko toy sale that comes here every November. I buy pretty much all my Christmas gifts for kids there, and get a few extra things (like barbies for $5) for birthday parties for the whole year.
I use washcloths too, and towels to clean up messes
I'm on a freecycle facebook group, and if toys are in good shape I'll take them and just clean them up with lysol wipes. Also, check the free section of kijiji often.