Jim,
we evaluate our litters at 7 1/2 weeks of age and rank the puppies based on our -- and several other breeders, judges and handlers -- opinion of which dogs are show quality and which are pet quality.
The dogs that go into show homes do so under a show contract that "requires" (actually requests) that they be shown a certain number of times when they get to be of showable age -- 6 months. If, when they are shown, they actually win with competition, then the opinions of the judges are the best indication that they are show dogs. If they don't win, then we don't require that they get shown any more. However, if the owners wish to continue to show them, and we agree, that's fine.
Our pets are sold under a limited AKC registration and a contract that requires them to be spayed or neutered at 12 months of age after we have had a chance to see them. The limited registration ensures that if those owners do breed the dog or bitch (you can only control a certain number of things) their puppies cannot be registered with the AKC.
We like to wait until the dogs are 12 months of age before they are neutered or spayed so that God's hormones can do their thing in terms of the physical development of the dog. Also, we like to view them at 12 months to see if there was something we missed when they were babies. Some dogs take longer to develop than others and we like to be able to look at them at 12 months and if they are show prospects at that age, we would offer to pay for showing them. That would require that we change the registration.
We have yet to do that. Not that we haven't seen some really lovely "pets" that probably could and should show. But our objective in breeding is to put good dogs into wonderful homes. Showing or breeding them is not our primary objective. Making sure they are loved for their lifetimes is.
Hope that answers your questions.
Jim