It came to me the other day when I was cleaning out the shed what my solution could be. We went to home depot and got two large garage storage shelves and I set them up in the shed. Then I took ALL the kids toys out there with only the exception of a special doll or stuffed animal each. By grouping them into boxes or baskets everything fit. Now what we do is every week the kids each get to take their toy baskets and pick a few each from the general stash.
We just got in from "toy shopping" a few minutes ago and you would think Christmas had come again. It is certainly keeping down the clutter inside and I think they will enjoy what they play with more.
Works for me!