O.P. If you're serious about this, I think it can be done, but forget about simply buying from a 'wholesaler/distributor' and reselling - as you have found out, the margins won't be there!
I'd be wary about putting up money for a franchise either. Money in stock is fine, you will always sell it eventually, but most of these franchises want waaaay too much!
Personally, providing you know your tools (and there's no point doing this if you don't) I'd find some manufacturers who are not well represented, perhaps smaller ones who only manufacture a few lines, and approach them directly. If you can pick up some quality items from foreign countries (not China, but maybe Europe or the U.K.) that have little or no distribution in the U.S. then that's even better. If you can take advantage of a strong dollar, better still!
P.M. me if you want some ideas!
P.S. Don't expect to make a living out of this! At first it will be a lot of work and no profit. Later, maybe some small profits. Pocket money rather than paying the mortgage though!
