You're a private seller? If so, and the bike sold was as described and by that I mean it was the correct make of bike, had two wheels and a seat if you said it did, etc etc... then the guy has no legal recourse to you. He has hardly any statutory rights when buying at auction from a private seller and certainly none if the goods arrived and they weren't as good as he was expecting. The onus is on the buyer at auction to exercise due legal diligence before bidding. If he did not come to view the bike before he bid then it is basically tough shit. Indeed, if he had come to pick the bike up personally after bidding and decided that its condition was worse than he expected it would still be tough shit on him. He'd still have to buy it. Or you could sue him. That's the beauty of auctions and Ebay.

But in this case it sounds like ParcelForce might have fooked up. If I were you I'd do all I could to assist in his compensation claim (and it is his compensation claim, mind) from ParcelForce. I had to make a claim last year after a new laptop screen that I'd bought (off Ebay) arrived and the package was smashed to fook. Post Office paid up in full within 6 weeks and I didn't even have to let anyone at the Post Office look at the damaged item or packaging, so the system does work.