If you're using steppers, then no encoders are required as is the case with servos.
You'd need a much bigger mill to justify servos
Some of the cheap controllers as sold on eBay have a bad reputation for reliability and are prone to lose the magic smoke with little provocation. It's not that much more expensive to go with a better controller such as those from
Xylotex or
Gecko.
Gecko drives are practically unkillable and therefore a good choice for hobbyist.
Stepper motors from China are incredibly cheap but freight is a killer.
Homan Design and
Ausxmods are 2 local suppliers of all things CNC. A good US source is
Keling