The one thing that you must have if you want to record audiobooks (especially if you want to work on paid projects) is a decent microphone.
There's no getting around this one.
I started out with an inexpensive microphone that I bought on Amazon.
The ATR 2100 (shown below) produces "okay" quality audio. It plugs right into your computer with an included USB cable, so it's very easy to setup and use.
It was good enough to get my first couple of projects and "test the waters" to see if narration was something I wanted to pursue long term.
If you are going to use a mic like this, I recommend picking up a desktop stand.
The stand that comes with the ATR 2100 is "okay" but it's not very flexible. Ideally you want something that is more adjustable, like this boom stand with an attached pop filter or this desktop stand.
I used the free program, Audacity, to record and edit my auditions. There are more complicated audio editing programs out there that you can purchase, however, I found that Audacity does everything that I need to record audiobooks for ACX.
It also works with just about every type of computer (except iPads or Chromebooks.)
And it's free!
Here's what my starter setup looked like:
Once I earned a bit of money from my first couple of audiobooks gigs and decided this was something that I wanted to pursue longterm, I invested in a better quality mic --the Rode Nt-1A -- which makes my audio sound crisp and clear :)