The way this game handles inventory is definitely rather unfortunate. Unfortunately, I don't see it changing any time soon. My method has been basically asking myself the following question: "Am I actually ever going to use it and if so, is it difficult to replace?". If the answer is "no", I sell it. Plenty of housing items, glams and such aren't very difficult to obtain again, should one wish it.

That being said, I would love a dedicated fishing bait inventory and I would also very much like to be able to put dyes into either the glamour dresser or the armoire. Having to keep them in my inventory so that I don't have to go digging through retainers every time I want to recolor something is very annoying.