diff --git a/core/webpack-compile/src/index.ts b/core/webpack-compile/src/index.ts
index 9a016d554..95f9d51e7 100644
--- a/core/webpack-compile/src/index.ts
+++ b/core/webpack-compile/src/index.ts
@@ -9,12 +9,14 @@ export const compile = ({
   webPack,
   presets,
   configPath,
+  outputFolder,
 }: CompileProps): Promise<CompileResults> => {
   return runCompiler((compiler, callback) => compiler.run(callback), {
     webPack,
     mode: 'production',
     presets,
     configPath,
+    outputFolder,
   });
 };
 
@@ -27,6 +29,7 @@ export const watch = ({
   presets,
   configPath,
   watchOptions,
+  outputFolder,
 }: WatchProps): Promise<CompileResults> => {
   return runCompiler(
     (compiler, callback) => compiler.watch({ ...watchOptions }, callback),
@@ -35,6 +38,7 @@ export const watch = ({
       mode: 'development',
       presets,
       configPath,
+      outputFolder,
     },
   );
 };
diff --git a/core/webpack-compile/src/types.ts b/core/webpack-compile/src/types.ts
index 689a5b0fa..fd430a6f0 100644
--- a/core/webpack-compile/src/types.ts
+++ b/core/webpack-compile/src/types.ts
@@ -18,6 +18,9 @@ export interface CompileProps {
    * path to the configuration file e.g : '.storybook'
    */
   configPath?: string;
+
+  /** public output folder for the bundle */
+  outputFolder?: string;
 }
 
 /**
diff --git a/core/webpack-compile/src/utilities.ts b/core/webpack-compile/src/utilities.ts
index 14ff7afba..7246883ea 100644
--- a/core/webpack-compile/src/utilities.ts
+++ b/core/webpack-compile/src/utilities.ts
@@ -18,7 +18,7 @@ export type CompileRunProps = CompileProps & {
 };
 
 const createConfig = (options: CompileRunProps): webpack.Configuration => {
-  const { webPack, presets, configPath, mode } = options;
+  const { webPack, presets, configPath, mode, outputFolder } = options;
   const plugins = [
     new LoaderPlugin({
       config: configPath,
@@ -48,6 +48,7 @@ const createConfig = (options: CompileRunProps): webpack.Configuration => {
       ...(webPack || {}),
     },
     presets,
+    { outputFolder },
   );
 
   //add all the aliases to avoid double loading of packages
diff --git a/core/webpack-configs/src/index.ts b/core/webpack-configs/src/index.ts
index ec923e891..a867bcc08 100644
--- a/core/webpack-configs/src/index.ts
+++ b/core/webpack-configs/src/index.ts
@@ -4,12 +4,18 @@ import { react } from './react';
 import { instrument } from './instrument';
 import { reactDocgen } from './react-docgen';
 import { reactDocgenTypescript } from './react-docgen-typescript';
-import { RuleOptions, RuleTypes, RuleType } from './types';
+import {
+  RuleOptions,
+  RuleTypes,
+  RuleType,
+  PresetOptions,
+  PresetType,
+} from './types';
 export * from './types';
 
 export { WebpackConfiguration };
 export const presetsFactory: {
-  [key: string]: WebpackConfiguration;
+  [key: string]: PresetType;
 } = {
   'react-docgen-typescript': reactDocgenTypescript,
   'react-docgen': reactDocgen,
@@ -17,6 +23,14 @@ export const presetsFactory: {
   react,
 };
 
+const getConfigredPreset = (name: string, options?: PresetOptions) => {
+  const preset = presetsFactory[name];
+  if (typeof preset === 'function') {
+    return preset(options);
+  }
+  return preset;
+};
+
 const arrayMerge = (dest: any[], src: any[]) => {
   const srcCache = src ? [...src] : [];
   const destItems = dest
@@ -55,17 +69,21 @@ const deepMerge = (dest: any, source: any) => {
  * expands the presets into webpack config
  * @param presets custom config
  */
-export const getWebpackConfig = (presets: RuleTypes): WebpackConfiguration => {
+export const getWebpackConfig = (
+  presets: RuleTypes,
+  options?: PresetOptions,
+): WebpackConfiguration => {
   const result: WebpackConfiguration = presets.reduce(
     (acc: WebpackConfiguration, config: RuleType) => {
       if (typeof config === 'string') {
-        const f = presetsFactory[config];
-        return deepMergeWithPresets(acc, f);
+        const p = getConfigredPreset(config, options);
+        return deepMergeWithPresets(acc, p);
       }
       if (config && (config as RuleOptions).name) {
         const name = (config as RuleOptions).name;
-        if (presetsFactory[name]) {
-          const r: WebpackConfiguration = presetsFactory[name];
+        const p = getConfigredPreset(name, options);
+        if (p) {
+          const r: WebpackConfiguration = p;
           const o: WebpackConfiguration = (config as RuleOptions).config;
           const merged: WebpackConfiguration[] = deepMergeWithPresets(r, o);
           return deepMergeWithPresets(acc, merged);
@@ -101,10 +119,11 @@ export const deepMergeWebpackConfig = (
 export const mergeWebpackConfig = (
   webPack?: WebpackConfiguration,
   presets?: RuleTypes,
+  options?: PresetOptions,
 ): WebpackConfiguration => {
   if (!presets) {
     return {};
   }
-  const newConfig = getWebpackConfig(presets);
+  const newConfig = getWebpackConfig(presets, options);
   return deepMerge(webPack || {}, newConfig);
 };
diff --git a/core/webpack-configs/src/react/index.ts b/core/webpack-configs/src/react/index.ts
index d6cb5f99f..6380b141e 100644
--- a/core/webpack-configs/src/react/index.ts
+++ b/core/webpack-configs/src/react/index.ts
@@ -1,6 +1,6 @@
-import { Configuration } from 'webpack';
+import { PresetType, PresetOptions } from '../types';
 
-export const react: Configuration = {
+export const react: PresetType = (options?: PresetOptions) => ({
   performance: { hints: false },
   module: {
     rules: [
@@ -20,19 +20,14 @@ export const react: Configuration = {
         ],
       },
       {
-        test: /\.(eot|md|svg|ico|jpg|jpeg|png|gif|ttf|woff|woff2|pdf|mp4|web|wav|mp3|m4a|aac|oga)$/,
+        test: /\.(eot|md|svg|ico|jpg|jpeg|png|gif|ttf|woff|woff2|pdf|mp4|web|wav|mp3|m4a|aac|oga)$/i,
+        exclude: [/node_modules/],
         loader: 'url-loader',
         options: {
           limit: 25000,
-        },
-      },
-      {
-        test: /\.(eot|md|svg|ico|jpg|jpeg|png|gif|ttf|woff|woff2|pdf|mp4|web|wav|mp3|m4a|aac|oga)$/,
-        use: {
-          loader: 'file-loader',
-          options: {
-            name: '[path][name].[hash].[ext]',
-          },
+          name: '[name].[hash].[ext]',
+          publicPath: '/static',
+          outputPath: options?.outputFolder,
         },
       },
       {
@@ -82,4 +77,4 @@ export const react: Configuration = {
   resolve: {
     extensions: ['.ts', '.tsx', '.js', '.jsx'],
   },
-};
+});
diff --git a/core/webpack-configs/src/types.ts b/core/webpack-configs/src/types.ts
index a1f9afdf3..c5801fc0b 100644
--- a/core/webpack-configs/src/types.ts
+++ b/core/webpack-configs/src/types.ts
@@ -7,3 +7,10 @@ export interface RuleOptions {
 export type RuleType = string | RuleOptions;
 
 export type RuleTypes = RuleType[];
+
+export interface PresetOptions {
+  outputFolder?: string;
+}
+
+export type PresetCallback = (options?: PresetOptions) => Configuration;
+export type PresetType = Configuration | PresetCallback;
diff --git a/integrations/gatsby-theme-stories/src/gatsby-node.ts b/integrations/gatsby-theme-stories/src/gatsby-node.ts
index 07aa65f33..6490de4cd 100644
--- a/integrations/gatsby-theme-stories/src/gatsby-node.ts
+++ b/integrations/gatsby-theme-stories/src/gatsby-node.ts
@@ -1,3 +1,4 @@
+import * as path from 'path';
 import {
   getDocPath,
   getStoryPath,
@@ -24,6 +25,8 @@ exports.createPages = async (
     webPack: options.webpack,
     presets: defaultPresets,
     configPath: options.configPath,
+    outputFolder:
+      options.outputFolder || `${path.join(process.cwd(), 'public')}`,
   };
   const { store } =
     process.env.NODE_ENV === 'development'
diff --git a/integrations/gatsby-theme-stories/src/types.ts b/integrations/gatsby-theme-stories/src/types.ts
index dda669ddd..c4d591d61 100644
--- a/integrations/gatsby-theme-stories/src/types.ts
+++ b/integrations/gatsby-theme-stories/src/types.ts
@@ -14,4 +14,9 @@ export interface LoaderOptions {
    * presets options that will be passed to the instrumenter.
    */
   presets?: RuleTypes;
+
+  /**
+   * output folder for generated bundle
+   */
+  outputFolder?: string;
 }