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Your island has two storage spaces:

Thumb Treehouse

Windmill Storage holds all harvested crops and special event items (e.g. wrapping paper, pumpkins, buckets of sand). Current maximum size is 2,540 storage slots (with storage upgrade pieces) and 4,515 (including all level-up rewards).

Treehouse Storage holds all other resources and goods. Current maximum size is 2,530 storage slots (with storage upgrade pieces) and 4,505 (including all level-up rewards).

You can also get additional storage slots from TradeFest Bonus Tiers, Special Seal Dives and Wishing Wellspring Island (wishes of Wisdom or Fate).

Storage upgrade pieces can be found in daily chests, from merchant ships, feeding Pets, wildlife, seal dives, and the Magical Tower.

Thumb Windmill

Guide

SS WindmillStorage

1) Measures your current storage capacity (this picture shows 36 out of 50 storage slots are filled).
2) Displays your stored items and their quantity.
3) Displays resources needed to increase storage space.
4) Tap to increase storage space (once resources or gems are available). Different resources are required for each of the storage spaces, and more resources are required each time you increase your storage.


It’s always a good idea to monitor your storage space to see what you can fit. Remember to upgrade when necessary!

Portrait-Pike
Reference:

The above is Quoted in part or full directly from the Official Paradise Bay FAQ