Most people recommend "construction" sand that is more coarse. You can read more about what I'm talking about here:
http://www.the-chicken-chick.com/2012/09/chicken-coop-bedding-sand-litter.html
Definitely do not use play sand because most of that type of sand is too fine and will clump...
I ended up purchasing it off Amazon last summer. I couldn't find a cheaper price... looked at Lowe's, Home Depot, Tractor Supply. It's expensive that's for sure.
I've used sand/PDZ a long time in my coop and really like it. No flies, no smell, easy to clean. I don't heat my coop in the winter and it hasn't been an issue. My girls don't spend much time walking around in there anyway. My run is protected from rain and they prefer to be out there unless...
There are predators out during the day.
My neighbor watched a red fox crawl under my privacy fence and into my back yard the other day. Middle of the day while I was at work. I never even knew we had fox hanging around. Dogs are a potential threat as well.
@DarthRooster check out this place. They are fairly close to us in NWA in West Fork. I've bought birds from him and they are great.
http://www.muddyfeathersfarm.com/ameraucana-1.html
I agree with the others that your coop doesn't have enough ventilation. Another observation looking at your picture... your steps look like roosting bars. Your chickens may think so too.
Greg, I only have 4. I bought a swedish flower hen and buff brahma pullet from a guy in Highfill. Then I bought a French Copper Marans and a Wellsummer from Muddy Feathers Farm in West Fork. They are a top notch place and I'm planning to go back there. You could call him and get chicks for...