1.) open photoshop

3.) go to image>image size>the image size box will popup
I am resizing to 160×160. Reduce either the width or height to the size you want the square. Pick the one that does not make the other less than the size you are wanting. I used the height for mine. This made the width a litte bigger than 160 but that is okay.

4.) Now open a new document, go to File>New. In the new box that appears put a width of 160 and a height of 160 and click OK.

This is what you will see now-

5.) Now using your move tool and your mouse drag your resized product image over the blank white new document you created. Move it around to find the placement you want.

6.) Now save it for the web by going to file, save for the web and you are done.