Wood pallets are used to deliver materials that range from building supplies to groceries. Some are recycled, collected and returned to be used again, but a lot are dumped. Those can be a good source of wood for projects like sheds. Most are free for the taking. You can build an entire shed of pallets, either by making walls with them or by taking them apart and using the lumber. You also can make a foundation of pallets, to support a shed with framed walls or with pallet walls. The secret for a pallet foundation is a good base.
Collect enough pallets of the same size for the shed foundation. Pallets come in various sizes, from 36-by-36 inches to 48-by-48 and are not uniform. Not all are square; some may be 40 by 48 inches, for instance. Get pallets with standard construction dimensions, like 36 or 48 inches.
Lay out the pallets in the size and shape of the shed you want. Use only pallets with no missing or broken boards and preferably use those with fresh wood that is not stained or degraded in any way. Use the point of the shovel to mark the outline of the pallet foundation in the dirt with at least 6 inches extra on all sides and set the pallets aside.
Excavate the shed area at least 6 inches deep with a shovel. Rake it as smooth and level as possible. Spread landscape fabric or black plastic over the entire area; overlap seams 6 inches and tape them to seal them. Edge the area with metal or plastic edging. Cover the area with medium gravel, about 1/2-inch in diameter, and compact it with a hand tamper up to ground level.
Set the pallets in place, butted together at edges and with supporting skids all running in the same direction. Lay a long board across them with a level on it and adjust the gravel base until the pallets are level, in all directions. Tie the pallets together with 2-by-4-inch boards around the perimeter and over all seams where two pallets meet. Use a screw gun and 3-inch galvanized screws to fasten the 2-by-4s so hammering does not disturb the level. Check the level again when all pallets are secured.
Cover the pallet foundation with 3/4-inch pressure-treated plywood and screw them to the 2-by-4s. Build your shed walls, with reclaimed pallet wood or framing lumber and make a shed like you would on any other foundation.