Once you have uploaded an image, you can only overwrite it with a new replacement image. Ideally, any thumbnail image you upload should already be sized to 75x75 pixels, so there won't be any cropping or distortion.
I know you can remove a Marketplace listing by editing the listing and removing all the Details, but then re-adding a listing for the same product would "revive" any images you'd previously uploaded for the original listing.
