If you are using a purchased design to add photo too, you should be using a high quality (300DPI) PNG transparent file.
In this video you will learn how to place a photo in both Silhouette Studio and Photoshop. This will allow you to make custom designs. In this example we are showing how to use a PNG sock design to add a photo.
The Design is a Sketch Owl Designs Original and can be found here for purchase.