I use tongs and a gas stove burner.
Ah, the unabomber method of wrapping—yes, I’ve heard of it.
I also use a hair dryer. You may have to hold the top insulator down with your finger until the top part of the wrap is shrunk enough to capture it and keep it from blowing away, or take a glue stick and just put a bit on the bottom of the insulator to hold it down. Otherwise it’s pretty easy.
If you got a heatgun, the shroud-thingy that looks like the business end of a backscratcher, lets you heat all sides uniformly at the same time.
Amazon got heatguns for 20bux and up. Got a Neusomething for that much courtesy of vipon, but there’s a Pruelde or whatnot that I just saw.
Eg,
Use the heat a foot above the burner. Works better then a hair drier for me as it shrinks instantly and more evenly. Butane lighter if you need a small touch up. Heat gun would probably work well also.
Can you usually rescue the top insulator or do I need to order some of them as well?
I’d order some if you can. They tend to blow away before the wrap captures them. It would save you from searching the floor for your insulator. I save them from junked batteries.
I use an Emisar D4 on turbo. 
But there are much more sensible and appropriate methods like heat-gun, hair dryer and a naked flame far enough away.
Heat guns are the best for battery wraps, but come in handy for a variety of things.
Get lighter colors if you want to be able to write on them so you know what batteries are underneath. Not all are as thick and rip proof as the originals. Start in the middle. Most hair dryers will work. If you use a heat gun, use the lowest setting.
I think a heat gun on low does better than a hair dryer, but I often use the latter just for convenience…depends on the wrap material, though. My hair dryer doesn’t get hot enough on its low air speed setting so I have to use high and that tends to want to move the cell or blow away the insulator…bathroom sink is raised above the countertop so that makes a good backstop and reflects some heat at the same time. Go slow and keep it distant for your first wrap or two until you get a feel for how the plastic reacts. I like to focus on the center first, at the creases, just until they start to shrink, then flip sides…that way the middle can help hold it in place and I can shift the cell fore or aft if need be. The cells will get hot - hotter than normal usage - so watch that and if you feel like you’ve gotten it toooo hot just let it cool and come back later. The shrink will still shrink when heat is applied after the first time, up until the point where the material is as shrunked as it can get. Do a test shrink to see if what you bought is cut to the best length (a millimeter or two might make a difference in the finished wrap). If you need to trim off a little bit, try to get that cut really exactly square.
There are some junky wraps out there that might split on the crease or are just easier to split or tear in use, and then there is the standard decent stuff that most people sell. Everything I’ve gotten from Illumn, Liion Wholesale, Fasttech, and Convoy have been pretty good. I also bought a bunch on aliexpress in roll form instead of pre-cut - it’s super cheap and good stuff, and you can get nearly any color and any size (great if you want to redo AA/AAA or anything that isn’t the usual big three cell diameters). It comes in clear, too, which is handy if you want to use a label beneath it such as a sliver of the old factory wrap or some paint/sharpie on the bare can for identification.
While you have it naked, take a look to make sure there isn’t any rusting or leakage to keep an eye on or signal maybe it’s time for recycling the cell.
On that note, if anyone has ever found a wrap that is just like the original factory Sony green, I’d love to find some. I’ve tried five different ones from various sources but none of them were really close at all, either in material type, gloss level, or the shade of green.
If your original wraps are not too bad — get some clear wraps and go over originals —most of the cells I use to buy from Richard were already double wrapped
It’s pretty simple. I just did a bunch over the past few weeks.
Heat gun on low I find is best. Vary the temp by moving the gun back and forth, pretty straight forward and intuitive. I’m bald so do not have a hair dryer. Would like to remain married so I don’t use hers. I salvaged all the top insulators. I bought some cut to length 18650 wrappers from Amazon a few years back.
Remove old wrapper. Place insulator. Insert into new wrapper. Make sure insulator is in place and enough new wrapper overlaps both ends (pretty much common sense really). Heat the positive side where the insulator is first which locks this in. Then 1seam, the other seam, then a quick once over. Literally move it along the seam and watch it disappear. By this time the bottom wrapper will shrink in place, if not hit the bottom. Not much heat required and it shrinks pretty fast. 3-4 seconds maybe once I turn on the heat gun. Left hand hold and moving the battery, right hand holding and controlling the heat gun.
After I’ll write the battery info including capacity with a sharpie.
If you don’t have a heat gun bushmaster, I highly recommend getting one. I use mine mostly for heat shrink tubing, but it also has other uses. Much more intense heat than a hair dryer. I got mine at Harbor Freight for pretty cheap.
I do not have a heat gun. Guess I should look into shopping for one, huh?
Not unless you want to. Careful use with a lighter or very low torch flame works, too. Even a can of sterno. But don’t use a microwave…
Nix on the microwave—ok, got it! 
I’ve rewrapped a handful of cells. I ALWAYS replace the insulator ring, and use a high quality wrap, because that wrap is what insulates the negative electrode (Most 18650’s are case negative, which means that the whole case is “hot”). I would not use a butane torch or lighter either, a hairdryer, or preferably a heatgun will give a much more even shrink. You can get a cheap heat gun for less than $10. The flame based torches can heat too much and weaken the wrap, in my experience.
It’s all just a matter of understanding and using your heat source correctly. Anything that reaches a temp that will start the shrink will work just fine, as long as you do. Not to be snarky, but if you can’t control a torch flame in such a way as to not damage the wrap or even the cell itself, by all means do not use that yourself! 
But it can be done just fine…would never suggest that someone learn and develop “torch skills” on cells/wraps, though…
^^Been practicing on lots of cigars. But still prefer a heat gun.