Discount School Supply is my favorite place to purchase basic arts and crafts materials. Although they do not carry materials for advanced art techniques, the sell all the basics for preschool and early elementary aged children at consistently good prices and of consistently good quality. Their house brand, "Colorations", has always been comparable to name brand products in my purchasing experience.
Especially worth looking at is their Biocolor paint. This paint is of better quality than a standard poster paint but without the off-putting smell of acrylic paints. It sticks to virtually anything, including plastic, and does not rub off leaving a powdery residue when dry. Discount School Supply has a whole line of additional products to go with the paint. One product turns the paint into slime, another when added makes it adhere to fabric. Shimmer and glitter add ins add sparkle to the paint. A line of ornaments can be decorated with the paint by adding it to a clear plastic shell. The paint can also be scraped and overlapped with interesting effects. We use this paint as our primary paint for most craft activities. The DVD of ideas is actually inspiring and full of useful suggestions.
Colorations Watercolors are also worth having. Unlike the dry disks of watercolors many of us had as children, these watercolors are already in liquid form in bottles. The pure, transparent colors are beautiful and pleasing to look at. The company also sells a variety of additional products to use with their watercolors, mostly simple craft ideas.
In addition, Discount School Supply carries pipe cleaners, beads, pom-poms, paper, collage items, scratch art, and a wide variety of clay all at prices that are usually better than what I can find locally. They often sell kits of materials at a discount compared to purchasing individually.
The company often has a "Free Shipping" option if you purchase a certain amount of materials. When I'm making an order, I ask around to other homeschooling friends so we can combine our orders and get the free shipping price.
One area of caution: the craft kits designed to make 12 or more of the same item I've purchased have been of varying quality. I don't recommend them as much as the art supplies themselves. Customer service at the company has also been very good in my experience.