The storage holds all the items that you either craft or collect: basic resources, crafted items, food, rare items and event items. You can see the storage in the bottom right corner of the screen, marked with a chest icon.

The storage capacity is limited. However, you can expand it with the upgrade of the corresponding storage buildings on your Home Island that you have from the very start of the game:
Stone storage
Food storage
Wood storage

Don't forget to regularly upgrade the capacity of your storage! With every new level you reach, you might need more and more resources. If the storage is full, you can free up some space in the following ways:

Exchange items with the merchant and/or shaman
Upgrade one of the mentioned storage buildings
Exchange extra resources for experience points

Not all items take up space in storage. All the items from the “Rare” category don’t take up space and can’t be exchanged. This means that you can have as many ambers, emeralds, torches and candles as you want, and they won't affect the available free space. If you can’t exchange an item for experience it’s an unmistakable sign that this item doesn't take up space ;)

Besides, there’s a separate section of the storage where you can store the decor of your island. If you need to collect some item during your explorations, it will also appear there. This section is located in the Shop (cart icon), and looks like a carton box.

In order to collect an item and move it to storage you need to tap and hold the item for a couple of seconds. Shortly after you will see a green upward arrow and a chest icon. Tap on the icon and the item will be transferred to the storage. You can read more about how to collect items here.