THUMBNAILS (also know as ICONS) are created automatically by your Yahoo Store. They are limited by the dimensions you set under VARIABLES called THUMB-HEIGHT and THUMB-WIDTH.
I recommend making sure your THUMBNAILS are no more than 2K or ~2000 bytes "heavy." You can also control the "weight" (or image FILE size) of your THUMBNAILS by making the THUMB-HEIGHT and THUMB-WIDTH smaller.
You can replace the auto-generated thumbnail with a custom graphic by uploaded the desired thumbnail image to the ICON position on a section or product.
The benefit of using custom ICONS is that you can create streamlined files that "weigh" less (smaller file sizes) because they have been optimized though an image compression program.
Decreasing the file size of your images decreases the load time of your images which makes your pages load faster which has been shown to increase the number of pages your prospects look at which has been shown to increase your sales.
Back in the day you have to hand upload all of your ICONS, but our good friend DON COLE has created an IMAGE UPLOAD TOOL