I read an article a while back on the different inkjet photo fabric sheets. If I remember correctly, the Electric Quilt and Printed Treasures ones were reviewed and not bad. I have used black for the text and it work fine. The image will print as it is on the screen if you are using the regular fabric sheets. If you use the iron on transfers, you'd have to flip it.
I think you might want to try Word over Excel because you might find it easier to center the text on the label. I often insert a clip art frame, then put a text box on top of it with the wording I want. It spruces it up a bit. Or you can just add words, resize to get the size label and text you want, experiment with different fonts.
Be sure to read the packaging to see what the particular brand you get says to do after. I forget the brand I used last, maybe Jacquard, but it says to let it sit 24 hours, then wet it down and let it dry. After that I press it. I know the ones I made the grandkids get washed often. They do fade a little, but still legible.
Have fun!