Two years ago Bill and Ann Muller were a pair of genial small-time toymakers on the Virginia Eastern Shore who looked and acted like Santa and Mrs. Claus.

Then they were "discovered." The fact that they love kids and made a living making simple, sturdy wooden toys that children love was so unusual in this day and age that the Mullers soon found themselves being featured on national television and in newspaper and magazine articles.

Naturally, business boomed. People flocked to their quaint little shop on U.S. 13 near the Chincoteague turnoff. Mail orders poured in. Bloomingdale's and other big- time department stores began to carry the toys and book the Mullers for personal appearances in Manhattan.

By now, according to American business tradition, the Mullers should either have sold out for big bucks or be sitting behind big desks telling the second-level executives to tell the third-level executives to tell the foremen to tell the workers to cut the coffee breaks and produce those damn toys.

Well, it hasn't happened. Success may have harried the Mullers and turned them a tad grayer, but it hasn't spoiled them. They still make their toys the same way, with no paint, no sharp edges, no metal parts and no little doodads. "I avoid detail," Bill Muller said. "The kids imagine their own details, and that makes the toys their own." Unless asked to do so the Mullers still put no trademarks on their toys, on the ground that once it leaves the shop it belongs to a child, "so why should it have our name on it?"

He also still offers a lifetime guarantee ("My lifetime, of course"): he will repair or replace any toy broken in normal play. And if a child comes up with an interesting idea for a new toy, Muller will make one free.

But there are changes coming: "Business has doubled and redoubled, and we just can't turn out toys fast enough in this space," Ann Muller said. "It isn't fair to ask people to work all crowded in like this. We've leased space for a new shop in Pocomoke City, a few miles up the road in Maryland. We'll have space for about 20 people, and better power equipment, but the toys will be the same. And we're getting ready to build a new store a few blocks from here, where there will be more play and display space."

The accent is on "play" space, because the shop generally is full of kids playing with toys. A sign says "Please Touch," and there are baskets of lollipops and saltwater taffy, smears of which inevitably wind up on the toys. Ann Muller affects not to notice and seems not to care. Slightly soiled items are scrubbed up with soap and water; the others are cleaned as much as possible and donated to kindergartens and day-care centers. Parents sometimes blanch at the prices, which run from a few dollars to a whole lot of dollars. Bill Muller shrugs and frowns. "Well, we have to pay our folks a decent wage, and you just ought to see the prices they get for this soft Western sugar pine. I don't use any other kind because this is tough but not hard and not splintery. And it tastes good."

The toys range from teething beads to an elaborate Noah's Ark with a zillion pairs of animals. Inventory is always low because the Mullers are always dropping whatever they should be doing to play with kids.

"Well, yes, we're behind and getting behinder," Muller said. "But I only make toys because it's fun seeing what the kids do with them. If I can't leave the bench when I feel like it, there's no point in going to the bench in the first place." He shook his head, loosing a cloud of sawdust, looking very like Santa fresh in from the snow.

CATALOGUE -- Write Bill Muller the Toymaker, Oak Hall, Virginia 23416.