I built this bike trailer out of an old jogging stroller.
Step 1: The Hitch Mechanism
Hitch mechanism made of 3/4" flat stock and a Quick Disconnect Type 3/8-24 Fine Standard Thread Ball Joint and Rod End. http://www.amazon.com/gp/product/B002HAUWCM/ref=oh_details_o01_s00_i00
$18 with shipping
I made some teflon washers to go against the bracket and tightened the backnut against the joint to allow a little slack for y-axis movement of the arm beyond the ball joint movement.
I made the mounting bracket from a zinc plated strut pipe clamp- $0
Step 3: The Tray
The wheels and from were from a jogging stroller that had been decaying in the back yard. The box is a spare drawer from our kitchen remodel. $0
Step 4: Tubing
The tubing was from the jogger handle. -$0
I used stainless deck screws to fasten the tubing to the tray.
Step 5: In use
The trailer loaded with 5 bags of ice, 12 pack of soda, and some misc groceries.