It is difficult to imagine, amid the general merriment and festivities of the Christmas period, that beneath it all many businesses are working at full stretch just to keep up with demand.

But for many retailers the last three months of the year, coupled with the January sales, are the busiest and most profitable period.

This year is widely expected to be particularly busy.

The Dublin Chamber of Commerce recently predicted that retail sales in the Dublin area would rise by approximately 5 per cent over the Christmas period compared with last year, with many traders expecting to benefit from the "Luas dividend".

So what can retailers do to maximise their sales during this all-important period? And how far in advance do Irish businesses have to prepare for the Christmas rush?

Mr Seán Murphy is head of policy and communications with the Chambers of Commerce of Ireland, which represent more than 12,000 businesses.

He says the Christmas period is extremely important for traders both here and elsewhere throughout the western world.

"A lot of businesses get a substantial amount of trade during the last three months of the year, and in particular during the last two months," says Mr Murphy.

"We know from our own dealing with the retail community that they are incredibly busy at the moment."

Traders need to bear in mind a number of considerations to maximise their sales during the Christmas period, says Mr Murphy.

These include promotions, branding your product through the use of imaginative packaging, and the layout and design of retail space.

Layout of retail space can be particularly difficult to organise, he says, as it is essential to arrive at a happy medium: you want to have a good amount of people in your shop; on the other hand, you need to ensure that your store is not so packed that it risks putting off potential shoppers.

"You need a speedy turnaround of purchases to minimise the queues at the cash register," he explains. "So you need good staff, and you have to think about the layout and location of the shop."

Retail crime has become a real worry for many retailers here, he say, with people stealing to order, leading to huge losses for individual businesses.

But the Christmas sales also allow many traders to clear any backlog of stock.

"Retailers know what they need to sell. If stock is sitting in the back of a warehouse, it is losing money and depreciating all the time," says Mr Murphy.

One man who knows only too well the value of the Christmas market is Mr Declan Fearon, managing director of Blarney Stone Enterprises, a specialist giftware company catering to the tourist market.

The Dublin company, which distributes its figurines and ornaments to more than 26 countries, has a strong internet presence which it uses to bring shoppers to its main customers: retailers.

Many people do not realise that Mr Fearon started planning for this year's Christmas around 18 months ago.

This is because most of his orders for retail stock are made as early as January.

"To get our stock in for the following October, we need to work 18 months prior to sales appearing in shops," he says.

"Because we are catering for tourists, it leaves us very exposed from October onwards, so if we didn't cater to the Christmas market we would die during the last quarter."

Predicting which stock will sell - and which stock won't - so far in advance is not always an exact science, Mr Fearon admits.

"You have to be pretty far-seeing... but nobody is able to forecast what will be a hot product," he says.

"You can never know tastes, although we only design what we can sell ourselves. This means nobody else has the same products as we do."

He tries to ensure that his products will be popular by creating a trend for a new product himself.

"The question is: who creates a trend? There is nothing to stop you creating a trend yourself," Mr Fearon explains.

"For example, this year we made blown-glass Christmas ornaments, which we hand decorated with shells. These are selling extremely well in places such as Florida."

Blarney Stone Enterprises focuses on two areas of the market: mainstream customers and tourists.

Mainstream customers are generally not looking for any "shamrock and shillelagh" merchandise, he says.

They want high-quality merchandise, which is the right size and shape, and which comes in the right quantity.

But in catering to the tourist market, Mr Fearon has to allow for a concept called "dating", which is used extensively in the United States, one of his key markets.

Under this arrangement, if a retailer buys stock in January at a trade show, and accepts delivery in September, it does not pay until the following January. In effect, this gives the retailer a 90-day window in which to pay for the products, which inevitably has implications for cashflow.

Mr Fearon points out that the retailers in question have to pay for whatever they have ordered.

However, he says that, even here, larger companies can look for unsold products to be accepted as returns, as well as for other discounts - although this is a risk that is often compensated for by the size of the order such companies will in turn place.

The Christmas period offers a lot of scope for traders to increase their profits. But it also requires a large degree of advance planning and preparation.

It is a thought that is worth bearing in mind, perhaps, as you stroll around your local shopping centre or retail street this Christmas, humming Yuletide tunes to yourself.