Most people are aware of what a puppy mill is, but backyard breeders seem to be able to fly under the radar. And it's the BYB's who produce the majority of purebred puppies, not the puppy mills. The BYB's are also responsible for all the genetic health issues in Yorkie's today.
BYB's can be "wolves in sheep's clothing". Some of them are really nice, raise their puppies in their home, sometimes even in little nurseries. The problem is that they breed pet quality dogs who are far from the Yorkie standard, know nothing about genetics, and don't do health testing like screening for liver shunts, luxating patellas, etc.
This is a great comparison between backyard breeders and reputable breeders:
http://www.geocities.com/Petsburgh/Fair/1901/chart.html Backyard Breeder vs. Reputable Breeder