Let's be clear on one thing: store bought fondant is disgusting. Okay, now that we're all on the same page, let's discuss homemade fondant. Yes, you can make it at home, yes, it's easy, and yes, it tastes good! So let's try it, shall we?
In a large bowl, stir together 16 ounces of mini marshmallows, 2 tablespoons of water, and food coloring (if you want it colored). Microwave for 30 second intervals, stirring each time, until the marshmallows are completely melted. Don't cook the marshmallows for longer than needed, otherwise it will harden like candy. Next, stir in 1 pound of sifted powdered sugar. Once that's stirred in, measure out 1/2 cup of shortening and put an additional 1 pound of sifted powdered sugar on the counter. Here's where it gets messy: rub half of the shortening all over your hands. Dump the marshmallow mixture onto the powdered sugar on the counter. Now knead, knead, knead! Occasionally knead in some of the shortening until it's all used. After 5 -10 minutes of kneading, the fondant should be smooth and soft and ready to be used for decorating. If it seems too dry, add in water a tablespoon at a time. If it seems too wet and sticky, add in more powdered sugar. If you're not going to use it immediately, cover with plastic wrap and store in an airtight container for about a week.