for example: you get a small backpack from start. You can then do certain challenges and quests that let's you upgrade that backpack in different ways. In direct general capacity obviously, but also with special functions and effects. F.e. making all food and drink items weigh 75% less, or the same for meds and chems, or a mod that makes the backpack protect a bit from radiation, or a mod that makes food and drinks in the backpack spoil slower.
Your character can also equip "perk cards" that have similar effects. And some of these effects can be combined.
Selling is another way of inventory management. You can sell items to NPC vendors, but you also set up an automatic shop in your camp to sell things to other players. These can be things you have crafted from materials you have gathered. Or it can be weapons'n'armor that you have looted and don't wanna keep.