First, take a very critical eye and weed out the things that are worn, have even slight staining, that you never really liked that much, etc. Then, put the clothing into seasonal and "like" piles - onesies, pajamas, shirts, pants, dresses, shoes, socks, coats. Then go through and choose a reasonable wardrobe for one child per season. Also weed out items that seem dated. If it is 10 years between kids of the same gender like in our family, some of the clothing will be very dated by the time you get around to using them. Onesies and winter coats never go out of style, but other things do. You can get underbed plastic storage boxes, which are very handy and utilize space for storage that is often overlooked.
It would bother me a great deal to get rid of things and then have to rebuy them, and I have ample storage space, so take those tips through that filter. I did not get rid of my boys' clothing until we found out that our last baby was a girl. I then had 40 boxes of boys' things that I sorted and passed on to others. Yes, 40. Some were diaper boxes so they were not large boxes at all, but I have a picture of my youngest son sitting at the top of "clothes mountain" before I got rid of it all. I also saved my girl clothes until we were done having babies. My girls are ten years apart in age so the fashions changed quite a bit, but some Laura Ashley dresses and such were very classic and were worn by my 22 year old niece, my 18 year old dd and my 7 year old dd after being passed down.