SharePoint Online document library structure: folders vs. document libraries vs. many sites

Question

I have more than 250,000 customers and growing. Each customers can have average 20 - 50 documents. There is no requirement for customers to access the document directly. An application will access the documents through REST APIs.

I need to store the documents in SharePoint online. There are choices for how to setup the SharePoint structure.

1. One document library under one site, and each customer will have an folder under the document library. This will result in large numbers of folders.
2. Each customer has its own document library under one site. This will result in large numbers of document libraries.
3. Each customer has its own site. This will result in large numbers of SharePoint sites.

Which way is better? Or there are some other better alternatives.

Answer 1

I would prefer option 2.

In sharepoint rest api, it has limitations when items in the library are more than 5000 items. So the first choice is not recommended.

And for the third option, you would need to connect to different sits in your code.