Making a label can't be easier since I read somewhere recently that you can print onto ordinary fabric using a home printer (I always thought you needed that expensive printer fabric for photos).
You can only use the black printer ink as colours will run so I usually use coloured pens to fill in details or (as on this one) applique on top to give some colour.
Cut a piece of freezer paper to A4 size. Iron onto (without steam) a same size piece of fabric as you would do when doing freezer paper applique. This will give you a stiff sheet of fabric which you can load (carefully!) into your printer tray.
To make the design I use WordArt on my computer but a simple label can be made using any text programme. Clipart (black and white) is good for adding details and frames etc.
Then just print.....
I let it dry for a few minutes then iron with a very hot iron, soak in hot water to check it doesn't run and dry and iron again.