Once you have ironed your picture on your onesie you will need to applique around the edges. I like to blanket stitch mine but you could also machine stitch.
Here it is completely finished:
I wanted to have a ruffle butt on this onesie but after making the ruffles, sewing them on, and looking at it I decided it was a complete disaster. It looked really bad, so I ripped them out and nixed the whole idea of ruffles. Maybe next time.