I was pretty ignorant of puppy mills and pet stores until I started spending a lot of time on this board. I probably would have bought a Yorkie from a pet store without a thought, but not after reading what I've read since.
Basil came from a backyard breeder. I Googled "Pennsylvania breeders Yorkshire Terriers" and found several. I saw his pic online and fell in love (he was the last one left out of a litter of 3). I called the breeder and drove about 2 hours to her house. His mom & dad were on site--they were the only Yorkies the lady owned and she breeds them every other year. They lived in the house and were AKC registered.
I lucked into a happy, healthy little dog and couldn't be happier!