Personally, I think handcrafted items are often more thoughtful than store bought gifts. Despite the item or skill level; especially when made by a child. I think some of my favorite gifts over the years were items my children made in school and pre-school.
If you are not the crafty sort, pop on over to Etsy. There are TONS of wonderful crafters including a few of my favorites:
These are just a few of my faves. Come visit soon and often to find wonderful handcrafted items!