I have been inboxed with an offer for an item which has 1 bid on it. What do i have to do next.

First cancel the current bid, then revise the listing to a BIN at the price that has been offered.

The buyer whose bid you cancelled isn't likely to return.  The person offering you more money isn't obliged to buy.

________________ I bid, I win, I pay - you deliver

Invite them to bid with everyone else, "A bird in the hand etc."

If you end the auction, you will lose the bidder you have, and your buyer might let you down.