start with fabric for your applique and a template or pattern for the applique.
this step is optional, but recommended.
Pellon makes a product called WonderUnder. it looks kind of like wax paper. it's going to make it so we can iron on the applique onto the skirt/purse/whatever. it makes it easier and more durable.
use the template to cut your shape out of the WonderUnder.
feeling a little lost? check out the sewing basics or post a question in the forum.
iron the WonderUnder piece onto your applique fabric (paper side up).
cut around the shape and peel the paper backing off.
place the applique onto your skirt/bag/whatever.
press with a hot iron according to the WonderUnder directions.