Images need to be stored on the system server in order to be embedded in your email. To do this, you need to upload all your images to the folder provided in the WYSIWYG editor in Step 2 of Message Composition.
Follow these steps to embed images:
In the Delivery Options step, check the Embed images checkbox under Content processing to enable embedded images. Embedding images is not recommended as they more than double the size of your message and negatively affect delivery. Mails with embedded images have a low success rate as most email clients, such as Outlook and Gmail, don't download images automatically.
To decrease the time it takes to load images in the inbox, we recommend keeping image sizes below 25KB and the image format set to low resolution (e.g. 72dpi RGB). The higher the resolution, and the wider and longer the image, the bigger the size. Big images will generally be blocked as they take too long to download or render.