I only have one 18-mo old son, so shopping for him isn't too out-of-control. We never pay full-price and stick to sales at Gap, H&M, Zara, etc. I've also found some bargains at consignment or re-sale shops, but generally think you can get the same prices for a brand new item on-sale.
The best answer would be to re-use old clothing with a little bit of handy alterations. Unfortunately, I'm not very good with the sewing machine, so I can't make an adult man's flannel into kids' pajamas. I'll leave that to the more clever moms out there...
{mommy chic} design. style. kids. life.