I think ur right. I have not had much luck finding tools at yard sales. Pawn Shops and resale shop have not worked at all. I guess yard selling is the answer
Keep noted this is a very labor and time intensive effort though.
As Dan always notes, he likes selling things at 2 a.m. while he's sleeping!
If you can make it work great, my props to you!
I would almost look for a margin higher than 2 or 3 times though.
Take your time, gas, etc. into consideration.
Just my $0.19 :)
Put a WTB (want to buy) ad up in craigslist. Pass out flyers. Go door to door if you have to. You are basically a "picker". Ever watch that show American Pickers? You can learn a lot from what they do. I wouldn't limit your sales to just tools(learn as much as you can about tools) but also branch out into other areas-bicycles or some antiques cars, sports cards etc. (You just need to do your homework.)
If you see garage sales listed in the paper or on Craigslist, I'd try to make some phone calls first (If possible). Save your gas and time at every opportunity. Those are going to be 2 of your biggest costs.
You are in customer relations more than you realize. If you call an individual and just blow them away with kindness on the phone, they more than likely will help you out.