It is not true that all puppymill pups go to petstores. If the USDA breeder is unable to sell all their pups to the dealer/broker due to a lack of demand or a defect where the dealer does not accept them, the breeder will sell online either on a site like puppyfind.com or its own website. If the breeder/dealer does not want to sell their pups via the internet, they can sell them at a dog auction. Here is the biggest dog auction http://www.swkennelauction.com/ and the other one is http://heartlandsale.com/index.html Heartland Sales usually has a lot of older pups for sale as compared to breeding dogs. SW Kennel Auction has been having a lot of dispersal sales this fall season. SW Kennel Auction is weekly from early September to early June and Heartland Sales is about once a month, I believe year round.
The best thing to do is to look up the breeder name on the USDA website and see if they are USDA licensed. The breeder could be either licensed as a breeder or a dealer. A dealer can be a breeder who can sell their own pups to a petstore or another breeder's pups to a petstore. The largest USDA dealer is The Hunte Corp. who sells the majority of pets to petstores.
Here is the website:
http://www.aphis.usda.gov/animal_welfare/pubs_reports.shtml
Look under reports which is down near the bottom of the page and click on ?List of Active Licensees and Registered Facilities.
You can also look at the inspection reports for all USDA licensed facilities at ?Inspection Reports which is also under reports.
Jennifer