Before you buy wholesale jewelry, it's important to ask yourself if these wholesale prices are really wholesale. It's easy to be lured by supposedly cheaper "wholesale" prices or the idea of a bargain, but you'll save yourself a lot of money by being an informed consumer. Before you attempt to buy a wholesale diamond or other piece of jewelry, read this article for some critical tips that can help protect you and your investment.

While some wholesalers are honest and legitimate sellers, others do misrepresent their products. This means you may buy a diamond that you believe to have a certain color or clarity grade only to unhappily discover you've actually purchased a lower-quality product that's worth much less. In some cases, you can wind up paying double what you would pay for a similar quality diamond with a traditional retailer. So, how do you protect yourself?

1. Always look at the product first.

Unless the retailer offers a clear and established refund policy in case of a misrepresented sale, never buy a valuable product without first examining it in person. Look at it on a dead-white background and be thorough in your examination for flaws, like blemishes or internal feathering.

2. Get the facts in writing from your wholesale merchant.

When you buy a precious gemstone, get the jeweler to write all the product's details down on the bill of sale. This includes the carat weight, color, flaw grades, cut, clarity remarks and dimensions. If the diamond or stone is certified, obtain a copy of any of these reports or certifications.

Also, if the piece supposedly comes from a well-known design house (for example Tiffany, Cartier or Arpels), and this affects the price, ask for the original designer to be noted on the bill of sale as well.

Once all this is noted, set an approved time period to allow you to have the piece appraised and the purchase approved. For example, note whether a two-day or thirty-day time period is allowed. Before you sign anything, make sure you're signing an approval form and not a purchasing contract.

3. Know that people don't give away precious gems.

Because of the current gem market, it's very unlikely that someone is going to give away a particular stone or gem. While there's definitely room to negotiate and maneuver, the price of certain gems tends to be set within a particular range. This means that if a deal is too good to be true, it usually is.

When purchasing jewelry online, take the following considerations into account.

How can I buy wholesale products safely?

Look for a retailer that outlines every facet and aspect of the piece and actually tries to inform you, the buyer, rather than dazzle you with big words and uninformative adjectives. You want sites that offer descriptions of the stones and pieces that are written or cleared either by certified gemologists or jewelry experts.

Where can I learn more?

If you're not comfortable with your knowledge level, try visiting a traditional, retail jeweler to get an idea of non-wholesale prices, but also stone terminology and styles.

How can I protect myself on auction sites?

When purchasing wholesale jewelry through an auction site, always read the fine print and study the auction's terms and conditions thoroughly. Make sure that you can return the item if you're not completely satisfied, and be sure to read a seller's reviews. Once you've purchased and received the item, take it to an appraiser immediately to make sure the stone matches the quality assessment given to you by the seller.

What is escrow payment?

For large-scale items, you may want to consider putting the funds in escrow. This means a neutral third party will hold the payment in tow until the jewelry has been assessed by an independent appraiser. Once the appraisal is finished, the funds go to the seller and the piece goes to the buyer. This method typically comes with a small service fee, but can be a very effective tool to protect against potential fraud.