I know this is an old thread, but I wanted to put my $.02 in. I attempted for the first time to make some clippies for my daughters dance class. I tried it both ways and I still don't know which way looks better. I tried vertically and accost the arms. I like accost the arms better but then the head is floppy. Maybe have a set of 2 one for regular hair and the other for pony's.
As a disclaimer I will add that I do not sell these at this point. I simply made them to give away at my daughters class. Her final day is tomorrow and the girls are exchanging gifts. So if you are selling them you might want to ask someone who has more experience