You mentioned customers, so I'm assuming that you'd want it to be a professional looking label. I agree that you probably would not be happy with a sewing machine that stitches letters as one of the decorative stitch option, I would definately go somewhere for a demo of one. There are embroidery only machines and if you are only going to do labels, you may be able to get away with the smallest size embroidery area which is 4X4 inches. Check on
http://www.allbrands.com/
they carry several brands.