I guess I have a different approach...just give it all away!
I go through DD's toys often and pick out things that don't meet my criteria:
1. She has played with it this week.
2. It's wooden, cloth, or natural/imaginative in some way.
3. It doesn't have batteries.
Our "main" toys are wooden blocks, stacking/nesting blocks, guitar, tambourine, harmonica, balls, playsilk...and a few small random things.
The only exception is books...and I still do get rid of some that I don't like. I'm brutal. My grandma gave her a stuffed animal one day...and I got rid of it the next. I'm down to 4 stuffed animals/dolls (an ugly doll, a waldorf doll, a teddy bear, and my doll from childhood that DD sleeps with).
Granted, it's much harder to get rid of stuff when they are old enough to 'figure out' that it's gone missing. DD doesn't really care much. I just still feel like she doesn't need all those toys! She would be happy with just three toys. And it wouldn't be such a sensory overload for her to decide what to play with.
Anyway...that's what I do. It may be a bit radical, but it works. If you stay on top of it...and take a box to Good will once every 2 weeks or so, it won't be so daunting.