We've been downsizing for about a year and a half now. Our daughter Caroline got us kicked off by organizing an online auction of unused beading supplies when she came to visit during cancer treatment. For the final phases, we've moved our bed from the large bedroom and now use that room for a staging area.
Large shelves hold things that are waiting for sale/donation or that we haven't decided if we can keep. A folding table with good light is used for sifting and sorting. Having a separate area with everything on shelves really helps keep it from getting overwhelming!