Creating Labels works differently from the other type of documents. The reason for this is we decided not to make our own Label designer. Such a tool is already available in Word and we did not see the value of duplicating that effort. As a consequence you first have to create an (empty) labels document in Word, which you use in the Mail Merge Wizard to fill the 'Based On' field.
Note: step 1. is only required if you have not previously created a document with matching labels settings. If you already have that, continue with 2.
1.1 Open Word
1.2 Tools > Letters and Mailings > Envelopes and Labels
1.2.1 Switch to tab Labels
Important: do not select Address here! That is done in Template Designer at the end of 2.
1.3 Press 'Options' to open the Label Options dialog.
1.3.1 Select the appropriate tray options
1.3.2a Select a label product ...
It is quite possible yours isn't listed, or you can't find it! In that case ...
1.3.3b Press New Label
1.3.3 Set the appropriate options, give your label a name (see description on the box?) and press OK
1.4 Press 'Add to document'.
1.5 Save the document using an easy to remember location and name (e.g. ..\My Documents\Labels.doc)
2.1 Mail Merge > New > Labels
This starts the Mail Merge Wizard.
2.1 Give a name to the process indicating the type of label that will be created.
2.2 Indicate if you want all records in the data source to be selected or only the current one (see also Select records to process / create documents from)
2.3 Check Print if you want the document directly to go to the printer
By setting a checkbox you indicate that you want to make use of one or more of the major additional processes, with additional tabs in the wizard appearing. These are discussed elsewhere (Automatic naming and storage of documents, Creating an Email)
2.4 Press Next button (->)
3.1 (optional keep or rename the template)
If the template already exists you will be asked if you want to use the existing one. If not, you will be asked if you want to overwrite it. If another process uses this template, you will be informed about it.
3.2 Specify the document or template you want to base the template on. This will be the one you made in step 1.
3.3 Press Next button (->)
4. Press the 'Create template and process' button. When the generation process is finished the Template Designer opens. It allows you to make the template as required by drag and dropping the mail merge address fields.
Running the mailing labels process van now be started from the Mail Merge Selection dialog.