As mentioned, cancel the sale stating buyer didn't pay. I learnt recently that choosing that option is almost instant now, rather than the old way, where you had to wait 4 days to open a non payment dispute, then wait another 4 days before you can close it. Buyer still gets a strike under the new system, and you should get your fees back.
Given there were 2 bidders, you could offer the first bidder a second chance. If they accept, they get it for the price they bid, which was your starting bid. They may choose not to respond to the offer, but it doesn't hurt to give them the option, especially if they could get the item for a really good price.
