[exline]

Since domain.com is in the same market as you then I would find a different domain. If they were in a completely different market, then I would not be as concerned.

Even though you think the other website will not gain much traction, you will be driving traffic to them. If someone hears about you and goes to domain.com and sees a product in the same market, they may very well assume that it is you. Nothing good can come from this. Either they don't like what the see and leave or they buy from the competition. Why take that risk.