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A template you prepare once is rendered thousands of times, so the half hour you spend in Photoshop is the cheapest half hour you will spend on it. Everything here happens before the first upload.
Photoshop is needed only to author the template. Every render after the upload runs without it.

File requirements

Keep the file under 100 MB when you can. Flattening the layers you never address makes the upload faster and changes nothing about the render.

What carries through from Photoshop

Transforms on a smart object are preserved, so build the geometry into the file rather than into your request body. Perspective Warp stays live and renders to match Photoshop, so leave it in place instead of baking it into pixels. Blend modes, opacity, masks, Drop Shadow, Stroke, Glow, Bevel and Blend If render as authored. Rasterize 3D layers and video layers before upload. Smart filters covers what stays live, and PSD compatibility has the row-by-row table.

Build the template

1

Convert each design area to a smart object.

Select the layers that will carry the design, right-click, and choose Convert to Smart Object. Its contents set the size of the design area.
2

Author the smart object contents at 3000 px or larger.

Scaling down keeps quality and scaling up does not, so author larger than you expect to need. Print work needs the pixels.
3

Name every smart object and text layer for a human.

Layer names come back in the upload response and are the only readable handle your integration has. Front Design still means something six months later. Layer 1 and Copy of Layer parse fine and tell you nothing.
4

Make the layers you intend to address visible.

A hidden smart object is not exposed as a slot. A hidden text layer stays a fillable slot instead, which is how one template carries optional lines. Both rules are in PSD compatibility.
5

Stack adjustments and overlays above the design areas.

Background at the bottom, then the product layers, then the design areas, then overlays such as texture and shadow, and adjustments on top. In that order a texture or a colour grade reads across the artwork the way it does on the finished product.
6

Flatten the layers you never address.

7

Embed any linked smart object.

Linked content renders from its placement geometry, so this is optional. Layer > Smart Objects > Embed Linked ends the file’s dependence on external content.
8

Save the file as .psd or .psb in RGB.

9

Publish the file at a URL that answers without a session.

The file is fetched server-side. A signed URL works. A link that redirects to a sign-in page does not, whatever your browser shows while you are logged in.
Open the URL in a private window before you upload. A file that starts downloading is reachable. A sign-in page or a 403 is not.
10

Upload the file and read back the slots you can address.

The response lists every smart object, text layer and group layer it detected, under the names you gave them. A layer missing from that list is one your integration cannot address. Group outlines inside a smart object render as designed and are not addressable on their own. The call is Create a mockup from a PSD; Upload a PSD explains every field. Render once at full size before the template goes into production.

Learn more

PSD compatibility

Check a Photoshop feature before you build a template on it.

Smart objects

See how a design area is described and addressed.

Next steps

Upload a PSD

Register the template once and read back every slot in it.

Render a PSD

Turn those slots into a finished image.