Need Craft Idea for Birthday Party

You could look on orientaltrading.com
Tons of craft kits.
What about a fall door hanger or a Christmas ornament?

coloring shirts
painting wooden airplanes or birdhouses or jewelry boxes
coloring mugs

Michaels has alot of cool stuff very affordable.

At walmart they have these foam puppet kits. I got them for my 3 and 5 (almost 6 year old) they loved them. They are animal puppets. all the foam pieces are peal and stick. I did need a glue gun to glue the popsicle stick to the puppet but that was it. There was a monkey, elephant and lion. They came with google eyes etc. they were really easy to put together and the kids really liked them.

A couple of crafts that we've done with a group about the same age are tie-dye shirts using the easy spray dye, fabric paint and fabric markers on white pillow cases (the kids loved sleeping on their creations!) and those wonderfully simple fleece pillow kits (all the kids have to do is tie the fringe together and then stuff them).
Good luck with your party!

One of my all time favorites is making picture frames out of popsicle sticks. You can glue them together ahead of time, then at the party the kids can paint them, decorate them with gliiter, glue, buttons, pom poms, stickers, whatever little goodies you want. They can also put a piece of self stick magnet strip on the back and the frame can go on the fridge. Take a picture of each child with the birthday girls and send it to them when you send out the thank you cards. It's a craft AND a memento from the party all in one!
You can get everything you need from any craft store :)

I like the idea of making hats. You can go to Hobby Lobby & buy those fabric markers, fabric paints, iron-on patches, bedazzle beads for the girls, all kinds of stuff. You could also make aprons.

Have you checked out Hobby Lobby, Michael's, or Oriental Trading? All have some REALLY cool craft kids/craft ideas.