In this FAQ section of our guide to Animal Crossing New Horizons, we explain whether is it possible and how you can increase the size of your backpack.
There's no more annoying thing than... the capacity of a backpack in Animal Crossing. In the previous installment it did not change at all, so you had to run to the store over and over again to sell what you had just found. Fortunately, in New Horizons, the game developers finally went to their senses and decided to allow players to increase the size of their backpacks.
You start the game with a backpack which has a 20 item slots. After some time, you will be able to double that number.
After a few days of gameplay - look for an item called Pocket Organization Guide which costs 5000 Nook Miles which is available in Nook Stop ATM located at Resident Services - this first-level upgrade will add 10 slots to your backpack.
The next level of backpack upgrade will be provided by the Ultimate Pocket Stuffing item worth 8000 Nook Miles, which can also be purchased by using the ATM at Resident Services.
This way, you will double the size of your inventory. As a result, you will waste much less time on running to a shop or house storage.