Heh, that's so funny, I'm in the middle of the same process you are
Except I've already got almost all my product made up. Now to con someone with a credit card into paying my Etsy fees...
Anywho, the whole thing started with people exclaiming they liked what I was wearing and then being surprised that I made it myself. My sewing-for-self strategy consists of using a simple long-sleeve tee pattern that I've butchered a million ways into awesome things with bibs, short puffed sleeves, long puffed sleeves, adding epaulets, buttons, studs, lace, etc etc. So that's the strategy I applied to my sewing-for-sale ideas. And honestly, the whole reason I decided to sell clothes I make is because I have too much clothing but want to be "allowed" to see all my ideas come to fruition.
So once I made the decision to sell my awesome shirts, I had to come up with a plan. I went fabric shopping! I came home with 4 fabrics that became the core of my "capsule collection." Since then, I've bought 5 additional fabrics and added 3 fabrics from my stash. Sounds like alot, huh? If you look at any two of the individual pieces I've already made (not counting duplicates), you can still see a common aesthetic between almost all of them, and if you add a third random piece, it makes even more sense. Basically, I wanted to provide as much variety as possible to appeal to a potentially wide range of customers, but still have enough in common that one individual could like all of them.
My one problem that I've yet to tackle is that all of my shirts are size medium to large! Why is this a problem? I found a gorgeous girl who'll model for me who happens to be size extra-small, so only certain things will look good on her tiny little body. Well, that and not having a credit card...
Ok, now that my long story is done, here's the result of my research and deep thought in a nutshell. Make things you love; know your target market; have a "brand image" in mind; size medium is called medium cuz it's "average" and thus the most commonly worn size (unless your target market is mainly petites or curvies); advertise locally as much as humanly possible and choose your online advertising carefully; have a PERSONAL webstore and/or blog to showcase your work; write up a policy page before you sell a single thing.
That was fun! My boyfriend is so sick of hearing about it, it felt good to write it all down
I hope you find it helpful.