I do this.

Inventory - consumables
Saddlebag - crafting mats (only valuable ones)
Retainers - tokens and miscellaneous

Got enough room for gear in armory chest, dresser, armoire.

I think the bottom line is just be selective about what you keep. If you have gear that you won't use any time soon or maybe never, then just sell it to npc / sell on market / deliver to GC.

Only keep items that you are actually using or are otherwise valuable or difficult to obtain again. Sell all the junk items you accumulate every day.