Clipping inward (or curved) seams.

The fabric around necklines, under the arms, between the legs, etc require an additional step in the seaming process called clipping.

For inward or concave curves, clip into the seam allowances at regular intervals to allow the fabric to spread and lie flat.  Clipping simply means cutting a slash into the fabric all along the curve.  This will prevent the fabric from "bunching up" after you reverse right side out.

For example, this teddy bear has curved seams between the arms and legs.  Snipping these seams will allow the fabric to lie flat when you reverse it right side out.