In addition to considering storing by color, size, purpose, collection, or whatever, it's also good to know how you function best. Are you inspired by seeing a rainbow riot of color all around you? Or, do you prefer to have things behind closed doors or in drawers? Or a little bit of each? I like things in drawers, in uniform sized shoeboxes with lids, behind closed closet doors. So I keep yardage in one dresser, smaller pieces by color --folded and lined up front to back in another dresser, and UFO's hanging by skirt hangers in the closet.
And I like to use same color/style scrap paper and ribbon to label everything in a way that makes sense to me and what's most efficient.
I started with the method of wrapping yardage around my own "comic boards" but I cut dollar store foam board to a size that fit my shelves. But, I soon got frustrated with the whole cycle of pull it out/audition it/wrap it back around and clip it w/ barrette/put it back on shelf. I was so ready to sew that it was just a pain to keep that system tidy for me.
I also tried ruler folding. Very neat, but oh so time-consuming and unrealistic for me to keep up.
I'm best with dresser drawers, folding my fabric into neat squares and storing them fold-up with styrofoam boards cut to size as dividers (to keep piles upright). It's not a perfect system but it's the best I've found for myself.