How do I begin a craft room?

I recommend starting with reducing. There's a strong chance that you have an overabundance of some materials that are not going to be used in the near future or duplicates of items. Try to thin out the excess and organization will be less stressful

Omgosh! You have no idea and the problem is that I will eventually use it all. I am caught up on how to separate with labels to divide everything up?

I sew, watercolor, and craft. My room was a mess until I invested in some clear plastic containers with lids. I sorted everything into those boxes, stacked them, and put easy-to-read labels on each. Now I just pull out the one I need and off I go. Everyone's way of organizing is different. You really need to decide what works for you. Some people suggest dressers with deep drawers. Some like cardboard boxes. Shelves can be useful, too. So much depends on you and the space you have. I have a big closet so the clear plastic boxes are perfect.

I used a peg board in my craft room it keeps all the supplies right where you need them https://www.homeroad.net/2013/01/pegboard-craft-organization.html

Thank you! I have pick pieces like furniture down to small wood pieces. I am someone who recycles!