Naming chests is extremely helpful, I can’t stress that enough. Also, using specific chest types is also a good way to categorize. In the end, it’s mostly based on you coming up with some sort of system.
This is how I do it
Incoming list of stuff:
Initially, I’ll have around 5. One for armor/weapons, one for blocks, one for accessories/rare drops/tools, one for plants and seeds, and one for mob drops.
When loot begins to over fill said chests, I end up with 3 groups of chests: main, extra, and general storage.
Main includes one for each weapon type, 2 for armors, 3 for vanity, 2 for ores, 1 for blocks, 1 for fishing items, 1 for plants, 1 for mob drops, 1 for seeds, 2 for banners, 2 for furniture, 2 for accessories, 1 for ammo and summons, 1 for pets and joke items, 1 for potions, 1 for music boxes, 1 for misc materials, 1 for mana and health potions, and 1 for oftenly switched out gear. Each only has 1 stack and any full stack is moved to extra storage or sold.
Extra storage is organized in a similar way but with lines of full stacks of items. I start selling things when this storage is full.
Misc storage is where I keep all my rare rng loot that I don’t want to sell, extra unsellable vanity items, and excess blocks in huge amounts. I don’t sort these at all.