You did sell your item. You just didn't ship your item. Since the item did sell, you will have to pay the $40 fee. If the buyer had not paid, you could have filed an unpaid item dispute and received a credit for the final value fee. However, since the buyer did pay, you can't file an unpaid item dispute and you therefore owe the fee.
If you want to sell the item for a higher amount, start it at a higher amount or use the Buy It Now feature and list at the price you want.
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Non payers should get unpaid item strikes and be added to block bidders lists. Period.