I haven't done one yet, but I think I've seen others say they rolled, or used a clay gun to get the gumpaste into a long roll, shaped it into the letters then let it dry. I'm guessing either toothpicks or floral wire are insterted into the bottom before it dries so it can be placed into the cake.
HTH 
I did monograms for the side of a cake 2 weeks ago. I printed out the monograms in the font the bride chose. Then, because I wanted the fonts to be a little thicker and more "exaggerated" to fit the cake (and so I could make sure that was what I really wanted), I overlaid a piece of acetate/plastic over the printed letters and drew the thicker letters on the plastic. Then I kneaded the gumpaste very well and made ropes to form the letters. After they dried, I brushed the initials with pearl dust. I attached them to the cake with buttercream. The bride loved them!
Guys, I have been talking to this bride that wants a monogram with rhinestones on them...okay..that's fine I can roll gum paste and when still fresh place the stones there ( don't know where to find stones?) but what I REALLY need to know is...HOW MUCH TO CHARGE PER LETTER??? Can anyone help me?
Thank you very much! 
))
Here is another website where you can order edible jewels.
http://www.fancyflours.com/site/xdpy/s/Cake%20Jewels/index.html
KimAZ
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