Domains for Niche Markets - Am I missing something?

Hello;

I'm asking this here, because my question really comes down to how the keywords I am looking at are going to get picked up in the search engine. Thanks in advance for your assistance.

In a niche marketing I am working on, I have been searching for domains. Overall it is an extremely popular market, high traffic, high competition.

However, I have found a number of domain names available for keywords that appear to have low competition, but show large numbers of searched in the google keyword tool.

Based on all the testing I have done, if you put up a decent web site on low competition keywords, it is pretty easy to get to the top of the search engine, even if there is a fairly high search volume.

I don't want to mention the names I am working on at the moment here in a public forum, so I will just give a made up example:

Lets say the the marketing I am working in is Cars, so I am looking for domains about specific things related to cars that I can use to generate traffic and sell targeted products.
I find the domain CarWax.com is available. I check the Google Keyword tool, I see that Car Wax gets 30,000 searches a month. I look at the results in google for Car Wax, I find there are a few sites that sell car wax, but they don't have these keywords in their names, and are poorly marketed sites(no pr /10M+ alexa). (in other words, they are the type of sites that in the past with other sites I have done, I have easily surpassed)

So in this example, if I buy CarWax.com, make a nice site, do the typical things that help build up a site in a search engine(fresh content, frequent updates, good onpage seo, etc.) is there any reason to believe that I won't see a good share of traffic from the search car wax, once my site works it's way up google?
I've done this before and had it work on other search terms that are low competition, but with the domains I am looking at this just seems a little too easy. I am having a hard time believing that no one else has taken these domains and done this exact thing if it will work on these words. (Note the domains are generic, like carwax, no trademark issues. Also the domains are for products people actually buy, similar to the car wax example)

For anyone else that uses a strategy like this to find niche markets, what is your minimum search volume you look for in the Google Keyword tool to make it worth your time to get a domain and setup a site? 5,000 10,000 20,000 more?

Thanks
Jamie Dolan