The 1099-K total reflects your total funds received, without any deductions for returns, fees, postage, etc. Those have to be entered separately as expenses on your Schedule C.
PayPal produces a handy 2-page "Annual financial Summary" Report that has a line item not only for your total PayPal income but also for total refunds and PayPal fees paid. You can also run PayPal transaction reports on the keyword USPS to get your total postage purchased.
