1: Rolled edge finish on top (done with serger--optional as edges are already finished)
2: Shirring on both front and back, spaced 1/4" apart. I think I did about 13 lines or so on each side.
3: Sew/serge sides together. Adjust to baby's size as necessary.
4: Make straps. I cut mine on the bias and then sewed/gathered pink ribbon to one side of each. You can do whatever you want though; I think think ties would be cute as well.
5: Finish Hem. I did the ribbon on the bottom hem like I did the straps. In fact, I thought this dress was a little too long so I shortened it and added another layer of ribbon and I like it so much better! Here are some pics before I the added ribbon and made it shorter:
Total price: $2!