MAKING THE MOST OF MINIATURES, FROM FUN TO PROFIT

COLUMBUS, Ohio, Aug. 21— Betty Rice owns a turquoise three-story Victorian house with two fireplaces, an $80 handmade chandelier in the front parlor and a bedroom furnished with an ornate brass bed.

Her house is a few steps from Gene Farrow's supermarket, where the shelves hold 65 flavors of canned soup, 10 brands of pet food and 10 kinds of frozen dinners. Just around the corner, a man is busy spray-painting a 50-year-old convertible in David Brown's garage.

Like everything else on display at the Miniature Industry Association of America's annual trade fair, no building in the neighborhood is more than four feet tall and the furnishings average three inches in height.

With doll house rooms that cost $10,000 to furnish and tiny oil paintings worth $6,000, the fair filled the sprawling suburban Northland Mall with collectors and owners of shops that specialize in selling miniatures. For the last four days they have placed orders, exchanged ideas and talked about how selling small things has become big business.

Tony Kohn, the association's president, said that sales of miniature furniture, figurines, doll houses and related items totaled $250 million last year and that there are 250,000 regular customers. While this year's figures are not in yet, many merchants here predicted that 1984 would turn out to be 5 to 10 percent better.

Charles Harley, who manufactures figurines, said that so far he had sold 2,800 Scarecrow statuettes at $75 apiece - a target he had not expected to reach before next March - and Chris Higgins reported that the annual profit from her Houston doll house store, Crickets and Caterpillers was $50,000.

These full-size results come from a business where everything else is small-size. Most miniatures are built on what is known as the one-twelfth scale, which means that in reproduction one inch equals one foot. All details are scaled down to match, including electrical requirements. Miniature chandeliers, for example, use 12 volts instead of the usual 110- volt house current, and owners of electrified doll houses must use a transformer.

Miniature housing has as many elements as the home-building trade itself - an endless variety of roof shingles, paint colors, wallpapers, hardware and moldings. And for furnishings there is everything from Colonial cradles and Queen Anne consoles to contemporary clear dining tables.

Seemingly, no household item has escaped miniaturization. Wholesalers here offered tiny nonworking versions of the Sony Walkman for $3, touch-tone telephones for $3.05 and Cuisinarts for $4.20. For $5, Mr. Farrow sells an assortment of paper shopping bags from Saks Fifth Avenue, Tiffany's and Altman's.

Collectors use these items for atmosphere in the tiny rooms they create. In decorating an American home of the 1950's - a period popular with collectors who were children at the time - some miniaturists buy little boxes of long-gone brands of laundry detergent and furry pink bedroom slippers. Others make everything from scratch.

''All you have to do is give me a saw, a sander and a drill press, and I'm in heaven,'' said Mrs. Rice, who does her best work between 11 P.M. and 3 A.M. She is currently making two doll houses that she plans to sell for $400 apiece, unfurnished. ''When you get hooked, nothing matters,'' she said. ''Do you think I'd pay $290 for a chandelier in my own house? Not on your life.''

Like many miniatures enthusiasts, Mrs. Rice got interested when she went shopping for doll house furniture for her daughter.

''What I found was really sad looking, so I built some,'' she said. ''Then for my granddaughter I built a doll house and every stick of furniture. The doll house sat on the dining room table, and there was just enough space left for my husband and myself to eat.''

Mrs. Rice said that initially she was, ''a closet collector - you didn't tell anybody what you were doing because they thought you were crazy, playing with toys.'' But these days, miniaturists are less covert. Robert Dankanicz, who is the owner of the Doll House Factory in Lebanon, N.J., said he recognized a change in his customers some years ago. ''All the people who used to come into the shop on the pretext of shopping for their daughters or granddaughters sighed and said they were glad it was out in the open,'' he recalled.

There is a change, too, in the design and quality of do-it-yourself miniature furniture kits. They offer better materials and a wider range of styles. One kit manufacturer, John R. Adams, quit his former job as an electronics sales manager for the Lockheed Corporation to set up a company, Shenandoah Designs Inc. of Brookfield, Conn., that specializes in reproducing miniature Chippendale chairs, Pennsylvania Dutch dressers and Shaker cupboards.

According to Mr. Adams, kits allow hobbyists to work at their own speed. ''It can take half an hour or three hours, depending on how fussy you are,'' he said.

Scaled-down single room-settings, usually housed in a three-sided box, seem to be increasingly popular. These set-pieces can be minatures of existing rooms, or whatever period the maker fancies. Clara M. Spence of Groveport, Ohio, for example, showed a miniature funeral parlor complete with oak casket. Virginia Schlaegel, also of Groveport, displayed a complete carpenter's shop, inspired by her son and husband, who are both in that trade.

Extensive research is often built into minaiture room settings. Mr. Kohn's Victorian bedroom and bath were the result of a year and a half of study. The key source for his tiny tub shower, he said, was an out-of-print book that he bought for $27.

Mr. Kohn's period taste mirrors trends in the miniature industry. A decade ago, he said, interest in Victoriana was ''minimal.'' But in recent years it has become ''Victoriana heavy,'' and there is a shift now toward the Colonial and Federal periods.

The business side of miniatures is different as well. A decade ago toy stores and gift shops were the major sources of supply. But in the mid- 1970's specialty miniatures shops began proliferating. ''Most were undercapitalized,'' said Mr. Kohn, ''and most were operated by owners without retailing experience.'' During the recession, some of these shops went out of business.

But Mr. Farrow, whose company is Farrow Industries in Fern Park, Fla., is a specialist among specialists. He has prospered by stocking pantry supplies for tiny kitchens. In five years he has worked out licensing agreements with 30 companies, and his inventory includes most of the H.J. Heinz Company's 57 varieties, 9 kinds of Hefty plastic bags and more than 20 Del Monte canned products.

''A lot of younger people identify with that stuff because they want to create something so their children will remember today,'' he said. ''Our problem is that the companies keep coming out with new products so fast we can't print them. At the rate they're changing their labels, our stuff will be antique pretty soon.''

But the fascination with miniature rooms, doll houses, furniture and their inhabitants is powerful.

''My latest doll house is an old Southern plantation with an Englishman and a French wife and a baby and servants,'' Mrs. Higgins said. ''You can stand back and your imagination will run away. Sometimes I wish I were 5 inches tall so I could climb in with them.''

photo of miniature display; photo of Virginia Schlaegel; photo of Clara Spence